6-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 6-K

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16
under the Securities Exchange Act of 1934

For: August 12, 2019

MAG Silver Corp.

(SEC File No. 0-50437)

#770 – 800 West Pender Street, Vancouver BC, V6C 2V6, CANADA

Address of Principal Executive Office

The registrant files annual reports under cover:				Form 20-F ¨		Form 40-F þ
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by
Regulation S-T Rule 101(b)(1):		¨
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by
Regulation S-T Rule 101(b)(7):		¨
Indicate by check mark whether by furnishing the information contained in this Form, the
registrant is also thereby furnishing the information to the Commission pursuant to Rule
12g3-2(b) under the Securities Exchange Act of 1934:					Yes ¨		No þ
If “Yes” is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): 82-
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Exhibits
99.1	Unaudited Condensed Interim Consolidated Financial Statements for period ending June 30, 2019
99.2	Management Discussion and Analysis for period ending June 30, 2019
99.3	Form 52-109F2 CEO Certification of Interim Filings
99.4	Form 52-109F2 CFO Certification of Interim Filings
99.5	News Release dated August 12, 2019 – Financial Results
Date: August 12, 2019			MAG Silver Corp.
			“George Paspalas”
			GEORGE PASPALAS
			President & CEO

EX-99.1

Exhibit 99.1

MAG Silver Corp. Unaudited Condensed Interim Consolidated Financial Statements (expressed in thousands of US dollars) For the three and six months ended June 30, 2019 and 2018   Dated: August 12, 2019

A copy of this report will be provided to any shareholder who requests it.

VANCOUVER OFFICE Suite 770 800 W. Pender Street Vancouver, BC V6C 2V6   604 630 1399 phone 866 630 1399 toll free 604 681 0894 fax TSX: MAG NYSE American : MAG www.magsilver.com info@magsilver.com

MAG SILVER CORP. Quarterlies require
Condensed Interim Consolidated Statements of Financial Position (Unaudtied)
(In thousands of US dollars, except shares - Unaudited)
	Note		June 30, 2019			December 31, 2018
ASSETS
CURRENT
Cash and cash equivalents		3	$	113,833		$	130,180
Accounts receivable		4		261			372
Prepaid expenses				688			327
TOTAL CURRENT ASSETS				114,782			130,879
INVESTMENTS		5		1,294			1,781
INVESTMENT IN ASSOCIATE		6		97,418			81,214
EXPLORATION AND EVALUATION ASSETS		7		4,976			3,648
PROPERTY AND EQUIPMENT		8		544			35
TOTAL ASSETS			$	219,014		$	217,557
LIABILITIES
CURRENT
Trade and other payables			$	386		$	1,563
Current portion of lease obligation		8		70			-
				456			1,563
NON-CURRENT
Lease obligation		8		501			-
Deferred income taxes				1,545			2,113
Provision for reclamation		7		260			-
TOTAL LIABILITIES				2,762			3,676
EQUITY
Share capital		9		398,442			392,916
Equity reserve				17,426			18,696
Accumulated other comprehensive loss				(1,129	)		(681	)
Deficit				(198,487	)		(197,050	)
TOTAL EQUITY				216,252			213,881
TOTAL LIABILITIES AND EQUITY			$	219,014		$	217,557
COMMITMENTS AND CONTINGENCIES		6,7,15
SUBSEQUENT EVENT		17

See accompanying notes to the condensed interim consolidated financial statements

2

MAG SILVER CORP.
Condensed Interim Consolidated Statements of Loss and Comprehensive Loss
(In thousands of US dollars, except for shares and per share amounts - Unaudited)
		For the three months ended						For the six months ended
		June 30						June 30
	Note	2019			2018			2019			2018
EXPENSES
Accounting and audit		$	85		$	95		$	143		$	163
Amortization			26			4			53			8
Filing and transfer agent fees			3			12			217			246
Foreign exchange (gain) loss			(43	)		47			3			77
General office expenses			310			297			480			495
Legal			51			55			137			163
Management compensation and consulting fees			501			460			1,077			934
Mining taxes and other property costs			57			113			353			482
Share based payment expense	9b,c,d		1,284			407			1,508			811
Shareholder relations			110			132			214			272
Travel			67			91			135			172
			2,451			1,713			4,320			3,823
INTEREST INCOME			782			783			1,626			1,465
GAIN ON SALE OF EXPLORATION AND EVALUATION ASSETS,
NET OF TRANSACTION COSTS			-			1,151			-			1,151
CHANGE IN FAIR VALUE OF WARRANTS	5		(21	)		(51	)		(39	)		(521	)
EQUITY PICK UP FROM ASSOCIATE	6		480			(1,623	)		762			(740	)
LOSS FOR THE PERIOD BEFORE INCOME TAX		$	(1,210	)	$	(1,453	)	$	(1,971	)	$	(2,468	)
DEFERRED INCOME TAX BENEFIT (EXPENSE)	16		249			(1,300	)		568			(102	)
LOSS FOR THE PERIOD		$	(961	)	$	(2,753	)	$	(1,403	)	$	(2,570	)
OTHER COMPREHENSIVE LOSS
Items that will not be reclassified subsequently to profit or loss:
UNREALIZED LOSS ON EQUITY SECURITIES,
NET OF TAXES	5		(301	)		(239	)		(448	)		(1,334	)
			(301	)		(239	)		(448	)		(1,334	)
TOTAL COMPREHENSIVE LOSS		$	(1,262	)	$	(2,992	)	$	(1,851	)	$	(3,904	)
BASIC AND DILUTED LOSS PER SHARE		$	(0.01	)	$	(0.03	)	$	(0.02	)	$	(0.03	)
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
BASIC AND DILUTED			86,058,593			85,507,628			85,800,468			85,499,155

See accompanying notes to the condensed interim consolidated financial statements

3

MAG SILVER CORP.
Condensed Interim Consolidated Statements of Changes in Equity
(In thousands of US dollars, except shares - Unaudited)
											Unrealized			Accumulated
		Common shares							Currency		gain (loss)			other
		without par value				Equity			translation		on equity			comprehensive						Total
	Note	Shares		Amount		Reserve			adjustment		securities			income (loss)			Deficit			equity
Balance, January 1, 2018			85,478,790	$	392,554	$	17,719		$	784	$	430		$	1,214		$	(191,248	)	$	220,239
Stock options exercised cashless	9a,b		58,191		342		(342	)		-		-			-			-			-
Restricted and performance share units converted	9a,c		2,495		20		(20	)		-		-			-			-			-
Share based payment	9b,c,d		-		-		1,339			-		-			-			-			1,339
Unrealized loss on equity securities	5		-		-		-			-		(1,895	)		(1,895	)		-			(1,895	)
Net loss			-		-		-			-		-			-			(5,802	)		(5,802	)
Total Comprehensive Loss			-		-		-			-		(1,895	)		(1,895	)		(5,802	)		(7,697	)
Balance, December 31, 2018			85,539,476	$	392,916	$	18,696		$	784	$	(1,465	)	$	(681	)	$	(197,050	)	$	213,881
IFRS 16 transition adjustment on January 1, 2019	8		-		-		-			-		-			-			(34	)		(34	)
Stock options exercised	9a,b		333,500		2,893		(915	)		-		-			-			-			1,978
Stock options exercised cashless	9a,b		384,507		1,480		(1,480	)		-		-			-			-			-
Restricted and performance share units converted	9a,c		66,589		557		(557	)		-		-			-			-			-
Deferred share units converted	9a,c		60,166		596		(596	)
Share based payment	9b,c,d		-		-		2,278			-		-			-			-			2,278
Unrealized loss on equity securities	5		-		-		-			-		(448	)		(448	)		-			(448	)
Net loss			-		-		-			-		-			-			(1,403	)		(1,403	)
Total Comprehensive Loss			-		-		-			-		(448	)		(448	)		(1,403	)		(1,851	)
Balance, June 30, 2019			86,384,238	$	398,442	$	17,426		$	784	$	(1,913	)	$	(1,129	)	$	(198,487	)	$	216,252
Six months ended, June 30, 2018
Balance, January 1, 2018			85,478,790	$	392,554	$	17,719		$	784	$	430		$	1,214		$	(191,248	)	$	220,239
Stock options exercised cashless	9a,b		58,191		342		(342	)		-		-			-			-			-
Restricted and performance share units converted	9a,c		2,495		20		(20	)		-		-			-			-			-
Share based payment	9b,c,d		-		-		811			-		-			-			-			811
Unrealized loss on equity securities	5		-		-		-			-		(1,334	)		(1,334	)		-			(1,334	)
Net loss			-		-		-			-		-			-			(2,570	)		(2,570	)
Total Comprehensive Loss			-		-		-			-		(1,334	)		(1,334	)		(2,570	)		(3,904	)
Balance, June 30, 2018			85,539,476	$	392,916	$	18,168		$	784	$	(904	)	$	(120	)	$	(193,818	)	$	217,146

See accompanying notes to the condensed interim consolidated financial statements

4

MAG SILVER CORP.
Condensed Interim Consolidated Statements of Cash Flows
(In thousands of US dollars, unless otherwise stated - Unaudited)
		For the three months ended						For the six months ended
		June 30						June 30
	Note	2019			2018			2019			2018
OPERATING ACTIVITIES
Loss for the period		$	(961	)	$	(2,753	)	$	(1,403	)	$	(2,570	)
Items not involving cash:
Amortization			26			4			53			8
Change in fair value of warrants	5		21			51			39			521
Deferred income tax (benefit) expense	16		(249	)		1,300			(568	)		102
Equity pick up from associate	6		(480	)		1,623			(762	)		740
Gain on sale of exploration and evaluation assets,
net of transaction costs			-			(1,151	)		-			(1,151	)
Share based payment expense	9b,c,d		1,284			407			1,508			811
Unrealized foreign exchange (gain) loss			(61	)		49			(11	)		66
Changes in operating assets and liabilities
Accounts receivable			5			237			110			(233	)
Prepaid expenses			(132	)		124			(361	)		(146	)
Trade and other payables			(197	)		(609	)		(448	)		(505	)
Net cash used in operating activities			(744	)		(718	)		(1,843	)		(2,357	)
INVESTING ACTIVITIES
Exploration and evaluation expenditures	7		(691	)		(389	)		(1,011	)		(669	)
Investment in associate	6		(15,375	)		(78	)		(15,456	)		(5,845	)
Disposition costs from sale of exploration and evaluation assets			-			(51	)		-			(51	)
Purchase of equipment			-			(3	)		(13	)		(3	)
Net cash used in investing activities			(16,066	)		(521	)		(16,480	)		(6,568	)
FINANCING ACTIVITIES
Issuance of common shares upon exercise of stock options	9		1,978			-			1,978			-
Payment of lease obligation	8		(15	)		-			(37	)		-
Net cash from financing activities			1,963			-			1,941			-
EFFECTS OF EXCHANGE RATE CHANGES ON
CASH AND CASH EQUIVALENTS			73			(49	)		35			(66	)
DECREASE IN CASH AND CASH EQUIVALENTS			(14,774	)		(1,288	)		(16,347	)		(8,991	)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD			128,607			152,692			130,180			160,395
CASH AND CASH EQUIVALENTS, END OF PERIOD		$	113,833		$	151,404		$	113,833		$	151,404

See accompanying notes to the condensed interim consolidated financial statements

5

MAG SILVER CORP.

Notes to the Condensed Interim Consolidated Financial Statements

For the three and six months ended June 30, 2019 and 2018

(Expressed in thousands of US dollars unless otherwise stated)

1. NATURE OF OPERATIONS

MAG Silver Corp. (the “Company” or “MAG”) was incorporated on April 21, 1999 under the Company Act of the Province of British Columbia and its shares were listed on the TSX Venture Exchange on April 21, 2000 and subsequently moved to a TSX listing on October 5, 2007. The Company was also listed on what is now the NYSE American Exchange on July 9, 2007.

The Company is an advanced stage exploration and development company that is focused on the acquisition, exploration and development of high-grade, district-scale projects located primarily in the Americas. The Company’s principal asset is a 44% interest in the Juanicipio joint venture (see Note 6) located in Mexico, which is now in the construction phase heading to production. The Company has not yet determined whether these mineral properties contain any economically recoverable ore reserves. The Company defers all acquisition, exploration and development costs related to the properties on which it is conducting exploration. The recoverability of these amounts is dependent upon the existence of economically recoverable reserves, the ability of the Company to obtain the necessary financing to complete the development of the interests, and future profitable production, or alternatively, upon the Company’s ability to dispose of its interests on a profitable basis.

Although the Company has taken steps to verify title to the properties on which it is conducting exploration and in which it has an interest, in accordance with industry standards for the current stage of exploration of such properties, these procedures do not guarantee the Company’s title. Property title may be subject to unregistered prior agreements and non-compliance with regulatory requirements.

Address of registered offices of the Company:

2600 – 595 Burrard Street

Vancouver, British Columbia,

Canada V7X 1L3

Head office and principal place of business:

770 – 800 West Pender Street

Vancouver, British Columbia,

Canada V6C 2V6

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Statement of compliance

These condensed interim consolidated financial statements (“Interim Financial Statements”) are prepared under International Accounting Standards 34 Interim Financial Reporting (“IAS 34”) in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). They do not include all of the information required for full annual IFRS financial statements and therefore should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2018.

The accounting policies applied in the preparation of the Interim Financial Statements are consistent with those applied and disclosed in the Company’s audited consolidated financial statements for the year ended December 31, 2018, except for policies newly adopted as stated below:

6

MAG SILVER CORP.

Notes to the Condensed Interim Consolidated Financial Statements

For the three and six months ended June 30, 2019 and 2018

(Expressed in thousands of US dollars unless otherwise stated)

IFRS 16 Leases. The Company adopted all the requirements of IFRS 16 Leases (“IFRS 16”) as of January 1, 2019. IFRS 16 supersedes IAS 17 Leases, IFRIC 4 Determining whether an Arrangement contains a Lease, SIC-15 Operating Leases Incentives and SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease. The standard sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for most leases under a single on-balance sheet model. The Company elected the cumulative catch-up approach resulting in no restatement of prior year comparatives. The Company elected not to recognize right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less and leases of low-value assets. The lease payments associated with these leases are recognized as an expense in the profit or loss. Note 8 outlines the effect of adopting the IFRS 16 requirements on January 1, 2019 opening balances.

At inception of a contract, the Company assesses whether a contract is, or contains a lease. A contract is, or contains a lease if the contract conveys the right to control the use of an identified asset for the period of time in exchange for consideration. The Company assesses whether the contract involves the use of an identified asset, whether the Company has the right to obtain substantially all of the economic benefits from use of the asset throughout the contract term and if the Company has the right to direct the use of the asset.

As a lessee, the Company recognizes a right-of-use asset and a lease liability at the commencement date of a lease. Right-of-use assets are initially measured at costs, which is comprised of the initial amount of the lease liability adjusted for any lease payment made at or before the commencement date.

Right-of-use assets are subsequently depreciated on a straight-line basis from the commencement date to the earlier of the end of the lease term, or the end of the useful life of the asset. In addition, the right-of-use asset may be reduced due to impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

A lease liability is initially measured at the present value of the lease payments to be made over the lease term, discounted by the interest rate implicit in the lease or if that rate cannot be readily determined, the Company’s incremental borrowing rate. Lease payments include fixed payments, variable lease payments that depend on an index or a rate, amounts to be paid under residual value guarantees and the exercise price of a purchase option reasonably certain to be exercised by the Company.

The lease liability is measured at amortized cost using the effective interest method. It is remeasured when there is a modification, a change in the lease term, a change in the fixed lease payments or change in the assessment to purchase the underlying asset.

The Company presents right-of-use asset in the property and equipment line item on the condensed interim consolidated balance sheets and lease liability in the lease obligation line item on the condensed interim consolidated balance sheets.

IFRIC 23 Uncertainty over Income Tax Treatments, provides guidance on the accounting for current and deferred tax liabilities and assets in which there is uncertainty over income tax treatments. The Company adopted this standard as of January 1, 2019 and it had no material impact on the Company’s consolidated financial statements.

7

MAG SILVER CORP.

Notes to the Condensed Interim Consolidated Financial Statements

For the three and six months ended June 30, 2019 and 2018

(Expressed in thousands of US dollars unless otherwise stated)

Annual Improvements 2015-2017 Cycle. In December 2017, the IASB issued narrow-scope amendments to IFRS 3- Business Combinations, IFRS 11-Joint Arrangements, IAS 12 – Income Taxes and IAS 23 -Borrowing Costs. The Company adopted these amendments as of January 1, 2019 and they had no material impact on the Company’s consolidated financial statements.

These Interim Financial Statements have been prepared on a historical costs basis except for the revaluation of certain financial instruments, which are stated at their fair value.

These Interim Financial Statements were authorized for issuance by the Board of Directors of the Company on August 7, 2019.

(a) Basis of consolidation

These Interim Financial Statements include the accounts of the Company and its controlled subsidiaries. Control exists when the Company has power over the investee, is exposed or has rights to variable returns from its involvement with the investee, and has the ability to use its power over the investee to affect the amount of the investor’s returns. Subsidiaries are included in the consolidated financial results of the Company from the effective date that control is obtained up to the effective date of disposal or loss of control. The principal wholly-owned subsidiaries as at June 30, 2019 are Minera Los Lagartos, S.A. de C.V., and Minera Pozo Seco S.A. de C.V. All intercompany balances, transactions, revenues and expenses have been eliminated upon consolidation.

These Interim Financial Statements also include the Company’s 44% interest in Minera Juanicipio S.A. de C.V. (Note 6), an associate (Note 2(b)) accounted for using the equity method.

Where necessary, adjustments have been made to the financial statements of the Company’s subsidiaries and associates prior to consolidation, to conform the significant accounting policies used in their preparation to those used by the Company.

(b) Investments in Associates

The Company conducts a high percentage of its business through an equity interest in associates. An associate is an entity over which the Company has significant influence, and is neither a subsidiary nor a joint arrangement, and includes the Company’s 44% interest in Minera Juanicipio S.A. de C.V., a Mexican incorporated joint venture company. The Company has significant influence when it has the power to participate in the financial and operating policy decisions of the associate but does not have control or joint control over those policies.

The Company accounts for its investments in associates using the equity method. Under the equity method, the Company’s investment in an associate is initially recognized at cost and subsequently increased or decreased to reflect additional contributions or withdrawals and to recognize the Company's share of earnings and losses of the associate and for impairment losses after the initial recognition date. The Company's share of earnings and losses of associates are recognized in profit or loss during the period. Distributions received from an associate are accounted for as a reduction in the carrying amount of the Company’s investment.

8

MAG SILVER CORP.

Notes to the Condensed Interim Consolidated Financial Statements

For the three and six months ended June 30, 2019 and 2018

(Expressed in thousands of US dollars unless otherwise stated)

Impairment

At the end of each reporting period, the Company assesses whether there is any evidence that an investment in associate is impaired. The Company has performed an assessment for impairment indicators of its investment in associate as of June 30, 2019 and noted no impairment indicators. This assessment is generally made with reference to the timing of exploration work, work programs proposed, exploration results achieved, and an assessment of the likely results to be achieved from performance of further exploration by the associate. When there is evidence that an investment in associate is impaired, the carrying amount of such investment is compared to its recoverable amount. If the recoverable amount of an investment in associate is less than its carrying amount, the carrying amount is reduced to its recoverable amount and an impairment loss, being the excess of carrying amount over the recoverable amount, is recognized in the period of impairment. When an impairment loss reverses in a subsequent period, the carrying amount of the investment in associate is increased to the revised estimate of recoverable amount to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had an impairment loss not been previously recognized. A reversal of an impairment loss is recognized in net earnings in the period the reversal occurs.

(c) Significant Estimates

The preparation of consolidated financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenditures during the reported period. Significant estimates used in preparation of these financial statements include estimates of the recoverable amount and any impairment of exploration and evaluation assets and of investment in associates, recovery of receivable balances, estimates of fair value of financial instruments where a quoted market price or secondary market for the instrument does not exist, provisions including closure and reclamation, share based payment expense, and income tax provisions. Actual results may differ from those estimated. Further details of the nature of these estimates may be found in the relevant notes to the consolidated statements.

(d) Critical judgments

The Company makes certain critical judgments in the process of applying the Company’s accounting policies. The following are those judgments that have the most significant effect on the consolidated financial statements:

(i) The Company reviews and assesses the carrying amount of exploration and evaluation assets, and its investment in associates for impairment when facts or circumstances suggest that the carrying amount is not recoverable. Assessing the recoverability of these amounts requires considerable professional technical judgment, and is made with reference to the timing of exploration work, work programs proposed, exploration results achieved by the Company and by others in the related area of interest, and an assessment of the likely results to be achieved from performance of further exploration (see Notes 2(b) and 2(g)).

9

MAG SILVER CORP.

Notes to the Condensed Interim Consolidated Financial Statements

For the three and six months ended June 30, 2019 and 2018

(Expressed in thousands of US dollars unless otherwise stated)

(ii) In the normal course of operations, the Company may invest in equity investments for strategic reasons. In such circumstances, management considers whether the facts and circumstances pertaining to each investment result in the Company obtaining control, joint control or significant influence over the investee entity. In some cases, the determination of whether or not the Company has control, joint control or significant influence over the investee entities requires the application of significant management judgment to consider individually and collectively such factors as:

· The purpose and design of the investee entity.

· The ability to exercise power, through substantive rights, over the activities of the investee entity that significantly affect its returns.

· The size of the company’s equity ownership and voting rights, including potential voting rights.

· The size and dispersion of other voting interests, including the existence of voting blocks.

· Other investments in or relationships with the investee entity including, but not limited to, current or possible board representation, loans and other types of financial support, material transactions with the investee entity, interchange of managerial personnel or consulting positions.

· Other relevant and pertinent factors.

If the Company determines that it controls an investee entity, it consolidates the investee entity’s financial statements as further described in note 2(a). If the Company determines that it has joint control (a joint venture) or significant influence (an associate) over an investee entity, then it uses the equity method of accounting to account for its investment in that investee entity as further described in note 2(b).  If, after careful consideration, it is determined that the Company neither has control, joint control nor significant influence over an investee entity, the Company accounts for the corresponding investment in equity interest as fair value through other comprehensive income investment as further described in note 2(e), and classifies the investment as current or non-current depending on management’s intention with respect to the investment and whether it expects to realize the asset within the next twelve months.

(e) Financial instruments

Financial assets

Financial assets are classified as either financial assets at fair value through profit or loss (“FVTPL”), fair value through other comprehensive income (“FVTOCI”) or amortized cost. The Company determines the classification of financial assets at initial recognition.

(i)Financial assets at FVTPL

Financial assets carried at FVTPL are initially recorded at fair value and transaction costs are expensed in profit or loss. Equity instruments that are held for trading and all equity derivative instruments are classified as FVTPL. Equity derivative instruments such as warrants listed on a recognized exchange are valued at the latest available closing price. Warrants not listed on a recognized exchange, but where a secondary market exists, are valued at independent broker prices (if available) traded within that secondary market. If no secondary market exists, the warrants are valued using the Black Scholes option pricing model. Realized and unrealized gains and losses arising from changes in the fair value of the financial assets held at FVTPL are included in profit or loss in the period in which they arise.

10

MAG SILVER CORP.

Notes to the Condensed Interim Consolidated Financial Statements

For the three and six months ended June 30, 2019 and 2018

(Expressed in thousands of US dollars unless otherwise stated)

(ii) Financial assets at FVTOCI

Financial assets carried at FVTOCI are initially recorded at fair value plus transaction costs with all subsequent changes in fair value recognized in other comprehensive income (loss). For investments in equity instruments that are not held for trading, the Company can make an irrevocable election (on an instrument-by-instrument bases) at initial recognition to classify them as FVTOCI. On the disposal of the investment, the cumulative change in fair value remains in other comprehensive income (loss) and is not recycled to profit or loss.

(iii) Financial assets at amortized cost

Financial assets are classified at amortized cost if the objective of the business model is to hold the financial asset for the collection of contractual cash flows, and the asset’s contractual cash flows are comprised solely of payments of principal and interest. The Company’s accounts receivable are recorded at amortized cost as they meet the required criteria. A provision is recorded based on the expected credit losses for the financial asset and reflects changes in the expected credit losses at each reporting period (see impairment below).

Financial liabilities

Financial liabilities are initially recorded at fair value and subsequently measured at amortized cost, unless they are required to be measured at FVTPL (such as derivatives) or the Company has elected to measure at FVTPL. The Company’s financial liabilities include trade and other payables which are classified at amortized cost.

The Company classifies financial instruments as follows:

Financial instrument	Classification
Cash and cash equivalents	FVTPL
Equity securities	FVTOCI
Equity derivative securities (warrants)	FVTPL
Accounts receivable	Amortized cost
Trade and other payables	Amortized cost
Lease obligations	Amortized cost

Impairment

IFRS 9 requires an ‘expected credit loss’ model to be applied which requires a loss allowance to be recognized based on expected credit losses. This applies to financial assets measured at amortized cost. The expected credit loss model requires an entity to account for expected credit losses and changes in those expected credit losses at each reporting date to reflect changes in initial recognition. In other words, it is no longer necessary for a credit event to have occurred before credit losses are recognized.

11

MAG SILVER CORP.

Notes to the Condensed Interim Consolidated Financial Statements

For the three and six months ended June 30, 2019 and 2018

(Expressed in thousands of US dollars unless otherwise stated)

(f) Cash and cash equivalents

Cash and cash equivalents include cash on hand, bank deposits, and term deposits with original maturities of three months or less.

(g) Exploration and evaluation assets

With respect to its exploration activities, the Company follows the practice of capitalizing all costs relating to the acquisition, exploration and evaluation of its mining rights and crediting all revenues received against the cost of the related interests. Option payments made by the Company are capitalized until the decision to exercise the option is made. If the option agreement is to exercise a purchase option in an underlying mineral property, the costs are capitalized and accounted for as an exploration and evaluation asset. At such time as commercial production commences, the capitalized costs will be depleted on a units-of-production method based on proven and probable reserves. If a mineable ore body is discovered, exploration and evaluation costs are reclassified to mining properties. If no mineable ore body is discovered, such costs are expensed in the period in which it is determined the property has no future economic value.

Exploration and evaluation expenditures include acquisition costs of rights to explore; topographical, geological, geochemical and geophysical studies; exploratory drilling; trenching and sampling; all costs incurred to obtain permits and other licenses required to conduct such activities, including legal, community, strategic and consulting fees; and activities involved in evaluating the technical feasibility and commercial viability of extracting mineral resources. This includes the costs incurred in determining the most appropriate mining/processing methods and developing feasibility studies. Expenditures incurred prior to the Company obtaining the right to explore are expensed in the period in which they are incurred.

When an exploration project has entered into the advanced exploration phase and sufficient evidence of the probability of the existence of economically recoverable minerals has been obtained, pre-operative expenditures relating to mine preparation works are capitalized to mine development costs. Activities that are typically capitalized include costs incurred to build shafts, drifts, ramps and access corridors to enable ore extraction from underground.

Impairment

Management reviews the carrying amount of exploration and evaluation assets for impairment when facts or circumstances suggest that the carrying amount is not recoverable. This review is generally made with reference to the timing of exploration work, work programs proposed, exploration results achieved by the Company and by others in the related area of interest, and an assessment of the likely results to be achieved from performance of further exploration. When the results of this review indicate that indicators of impairment exist, the Company estimates the recoverable amount of the deferred exploration costs and related mining rights by reference to the potential for success of further exploration activity and/or the likely proceeds to be received from sale or assignment of the rights. When the carrying amounts of exploration and evaluation assets are estimated to exceed their recoverable amounts, an impairment loss is recorded in profit or loss. The cash-generating unit for assessing impairment is a geographic region and shall be no larger than the operating segment. If conditions that gave rise to the impairment no longer exist, a reversal of impairment may be recognized in a subsequent period, with the carrying amount of the exploration and evaluation asset increased to the revised estimate of recoverable amount to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had an impairment loss not been previously recognized. A reversal of an impairment loss is recognized in profit or loss in the period the reversal occurs.

12

MAG SILVER CORP.

Notes to the Condensed Interim Consolidated Financial Statements

For the three and six months ended June 30, 2019 and 2018

(Expressed in thousands of US dollars unless otherwise stated)

(h) Property and equipment

Property and equipment are recorded at cost less accumulated amortization and impairment losses if any, and is amortized at the following annual rates:

Computer equipment	30% declining balance
Office equipment	30% declining balance
Right-of-Use assets	straight-line over the earlier of the end of the lease term or useful life of the asset

When parts of an item of equipment have different useful lives, they are accounted for as separate equipment items (major components) and depreciated over their respective useful lives.

(i) Income taxes

Deferred income taxes relate to the expected future tax consequences of unused tax losses and unused tax credits and differences between the carrying amount of statement of financial position items and their corresponding tax values. Deferred tax assets, if any, are recognized only to the extent that, in the opinion of management, it is probable that sufficient future taxable profit will be available to recover the asset. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of substantive enactment.

(j) Provisions

Provisions are liabilities that are uncertain in timing or amount. The Company records a provision when and only when:

(i) The Company has a present obligation (legal or constructive) as a result of a past event;

(ii) It is probable that an outflow of resources embodying economic benefits will be required to settle the obligation; and

(iii) A reliable estimate can be made of the amount of the obligation.

Constructive obligations are obligations that derive from the Company’s actions where:

(i) By an established pattern of past practice, published policies or a sufficiently specific current statement, the Company has indicated to other parties that it will accept certain responsibilities; and

(ii) As a result, the Company has created a valid expectation on the part of those other parties that it will discharge those responsibilities.

13

MAG SILVER CORP.

Notes to the Condensed Interim Consolidated Financial Statements

For the three and six months ended June 30, 2019 and 2018

(Expressed in thousands of US dollars unless otherwise stated)

Provisions are reviewed at the end of each reporting period and adjusted to reflect management’s current best estimate of the expenditure required to settle the present obligation at the end of the reporting period. If it is no longer probable that an outflow of resources embodying economic benefits will be required to settle the obligation, the provision is reversed. Provisions are reduced by actual expenditures for which the provision was originally recognized. Where discounting has been used, the carrying amount of a provision increases in each period to reflect the passage of time. This increase (accretion expense) is included in profit or loss for the period.

Closure and reclamation

The Company records a provision for the present value of the estimated closure obligations, including reclamation costs, when the obligation (legal or constructive) is incurred, with a corresponding increase in the carrying value of the related assets. The carrying value is amortized over the life of the mining asset on a units-of-production basis commencing with initial commercialization of the asset. The liability is accreted to the actual liability on settlement through charges each period to profit or loss.

The provision for closure and reclamation is reviewed at the end of each reporting period for changes in estimates and circumstances, including as a result of changes in regulatory requirements, discount rates and assumptions regarding the amount and timing of the expenditures. These changes are recorded directly to the related assets with a corresponding entry to the reclamation provision. A provision was recorded by the Company as at June 30, 2019 of $260 to account for prior disturbances on an exploration property recently acquired (see Note 7) (December 31, 2018 – nil).

The operating company of the Company’s investment in associate, Minera Juanicipio, S.A. de C.V., recorded a provision for reclamation and remediation costs of $481 and capitalized a corresponding asset as at June 30, 2019 (December 31, 2018: $450) (see Note 6).

(k) Functional currency and presentation currency

The functional currency of the parent, its subsidiaries, and the investment in associate is the United States dollar (“US$”).

Each entity within the Company determines its own functional currency, and the items included in the financial statements of each entity are measured using that functional currency. The functional currency determination involves certain judgments in evaluating the primary economic environment, and the Company reconsiders the functional currencies of each entity if there is a change in the underlying transactions, events and conditions which determine the primary economic environment.

The Company’s reporting and presentation currency is the US$.

(l) Foreign currency transactions

Transactions incurred in currencies other than the Company’s functional currency (foreign currencies) are recorded at the rates of exchange prevailing at the dates of the transactions. At each statement of financial position date, monetary assets and liabilities are translated using the period end foreign exchange rate. Non-monetary assets and liabilities are translated using the historical rate on the date of the transaction. Non-monetary assets and liabilities that are stated at fair value are translated using the rate on the date that the fair value was determined. All gains and losses on translation of these foreign currency transactions are included in profit or loss.

14

MAG SILVER CORP.

Notes to the Condensed Interim Consolidated Financial Statements

For the three and six months ended June 30, 2019 and 2018

(Expressed in thousands of US dollars unless otherwise stated)

(m) Loss per common share

Basic loss per share is based on the weighted average number of common shares outstanding during the period.

Diluted loss per share is computed using the weighted average number of common and common equivalent shares outstanding during the period. Common equivalent shares consist of the incremental common shares upon the assumed exercise of stock options and warrants, and upon the assumed conversion of deferred share units and units issued under the Company’s share unit plan, to the extent their inclusion is not anti-dilutive.

As at June 30, 2019, the Company had 2,254,322 (June 30, 2018: 2,858,226) common share equivalents consisting of common shares issuable upon the exercise of outstanding exercisable stock options, restricted and performance share units, and deferred share units were not included for the purpose of calculating diluted loss per share as their effect would be anti-dilutive.

(n) Share based payments

The fair value of equity-settled share-based payment awards are estimated as of the date of the grant and recorded as share-based payment expense in the consolidated statements of loss over their vesting periods, with a corresponding increase in equity. The amount recognized as an expense is adjusted to reflect the number of awards for which the related service and non-market vesting conditions are expected to be met. Market price performance conditions are included in the fair value estimate on the grant date with no subsequent adjustment to the actual number of awards that vest. Forfeiture rates are estimated on grant date, and adjusted annually for actual forfeitures in the period. Changes to the estimated number of awards that will eventually vest are accounted for prospectively. Share based payment awards with graded vesting schedules are accounted for as separate grants with different vesting periods and fair values.

The fair value of stock options is estimated using the Black-Scholes-Merton option valuation model. The fair value of restricted and deferred share units, is based on the fair market value of a common share equivalent on the date of grant. The fair value of performance share units awarded with market price conditions is determined using the Monte Carlo pricing model and the fair value of performance share units with non-market performance conditions is based on the fair market value of a common share equivalent on the date of grant.

(o) Changes in Accounting Standards

The Company has reviewed new accounting pronouncements that have been issued but are not yet effective at June 30, 2019. These include:

IFRS 3 Business Combinations. In October 2018, IASB issued narrow-scope amendments to IFRS 3 Business Combinations to improve the definition of a business. The amendments are intended to assist entities to determine whether a transaction should be accounted for as a business combination or an asset acquisition. The amended definition emphasizes that the output of a business is to provide goods and services to customers, whereas the previous definition focused on returns in the form of dividends, lower costs or other economic benefits to investors and others. The amendment is effective for acquisitions that occur on or after January 1, 2020 with earlier application permitted. The Company will adopt this amendment on the effective date, and is currently evaluating the impact this standard may have on its consolidated financial statements.

15

MAG SILVER CORP.

Notes to the Condensed Interim Consolidated Financial Statements

For the three and six months ended June 30, 2019 and 2018

(Expressed in thousands of US dollars unless otherwise stated)

3. CASH AND CASH EQUIVALENTS

The Company’s cash and cash equivalents include cash on hand, bank deposits and term deposits with original maturities of three months or less, as follows:

	Interest	June 30,		December 31,
	Rate	2019		2018
Cash at bank and on hand	0 - 2.53%	$	18,833	$	55,180
Term deposit (less than 90 days)	2.57 - 2.67%		95,000		75,000
Cash and cash equivalents		$	113,833	$	130,180

Term deposits classified as ‘cash equivalents’ are comprised of bank term deposits with a term to maturity of less than three months from date of acquisition and interest only payable if held to maturity.

4. ACCOUNTS RECEIVABLE

	June 30,		December 31,
	2019		2018
Goods and services tax ("GST") recoverable	$	49	$	22
Mexican value added tax ("IVA") recoverable		58		133
Interest receivable		154		217
	$	261	$	372

5. INVESTMENTS

The Company holds investments as follows:

	June 30,		December 31,
	2019		2018
Equity securities	$	1,294	$	1,742
Warrants		-		39
	$	1,294	$	1,781

16

MAG SILVER CORP.

Notes to the Condensed Interim Consolidated Financial Statements

For the three and six months ended June 30, 2019 and 2018

(Expressed in thousands of US dollars unless otherwise stated)

During the three and six months ended June 30, 2019, the Company recorded an unrealized loss of $301 and $448 respectively, net of nil tax, in other comprehensive loss (June 30, 2018: $239 and $1,334 respectively) on investments in equity securities designated as FVTOCI instruments. The following table summarizes the movements of equity securities:

	June 30,			December 31,
	2019			2018
Equity securities, beginning of period	$	1,742		$	2,435
Additions (see Note 7)		-			1,202
Unrealized loss for the period		(448	)		(1,895	)
Equity securities, end of period	$	1,294		$	1,742

During the three and six months ended June 30, 2019, the Company recorded an unrealized loss of $21 and $39 respectively, in the statement of loss, on warrants held and designated as FVTPL (June 30, 2018: $51 and $521 respectively). The following table summarizes the movements in warrants:

	June 30,			December 31,
	2019			2018
Warrants, beginning of period	$	39		$	661
Change in fair value of warrants		(39	)		(622	)
Warrants, end of period	$	-		$	39

6. INVESTMENT IN ASSOCIATE (“MINERA JUANICIPIO S.A. DE C.V.”)

The Company acquired a 100% interest in the Juanicipio property effective July 16, 2003. Pursuant to an agreement effective July 1, 2005 (the “Agreement”) with Industrias Peñoles, S.A. de C.V. (“Peñoles”), the Company granted Peñoles or any of its subsidiaries an option to earn a 56% interest in the Juanicipio Property in Mexico in consideration for Peñoles conducting $5,000 of exploration on the property over four years and Peñoles purchasing $1,000 of common shares of the Company in two tranches for $500 each.

In mid 2007, Peñoles met all of the earn-in requirements of the Agreement. In December 2007, the Company and Peñoles created an operating company named Minera Juanicipio, S.A. de C.V. (“Minera Juanicipio”) for the purpose of holding and operating the Juanicipio Property. In 2008, MAG was notified that Peñoles had transferred its 56% interest of Minera Juanicipio to Fresnillo plc (“Fresnillo”) pursuant to a statutory merger. Minera Juanicipio is held 56% by Fresnillo and 44% by the Company. Fresnillo is the operator of Minera Juanicipio, and with its affiliates, beneficially owns 11.3% of the common shares of the Company as at June 30, 2019, as publicly reported. In December 2007, all mineral rights and surface rights relating to the Juanicipio project held by the Company and Peñoles, respectively, were ceded into Minera Juanicipio. Minera Juanicipio is currently governed by a shareholders agreement. All costs relating to the project and Minera Juanicipio are required to be shared by the Company and Fresnillo pro-rata based on their ownership interests in Minera Juanicipio, and if either party does not fund pro-rata, their ownership interest will be diluted in accordance with the Minera Juanicipio shareholders agreement.

17

MAG SILVER CORP.

Notes to the Condensed Interim Consolidated Financial Statements

For the three and six months ended June 30, 2019 and 2018

(Expressed in thousands of US dollars unless otherwise stated)

The Company has recorded its investment in Minera Juanicipio using the equity basis of accounting. The cost of the investment includes the carrying value of the deferred exploration and mineral and surface rights costs incurred by the Company on the Juanicipio Property and contributed to Minera Juanicipio plus the required net cash investment to establish and maintain its 44% interest.

The Company’s investment relating to its interest in the Juanicipio property and Minera Juanicipio is detailed as follows:

	June 30,		December 31,
	2019		2018
Joint venture oversight expenditures incurred 100% by MAG	$	170	$	330
Cash contributions to Minera Juanicipio (1)		15,272		23,583
Total for the current period		15,442		23,913
Equity pick up of current income for the period (2)		762		227
Balance, beginning of period		81,214		57,074
Balance, end of period	$	97,418	$	81,214

⁽¹⁾ Represents the Company's 44% share of Minera Juanicipio cash contributions for the period.

⁽²⁾ Represents the Company's 44% share of Minera Juanicipio's income for the period, as determined by the Company.

Summary of financial information of Minera Juanicipio (on a 100% basis reflecting adjustments made by the Company, including adjustments for differences in accounting policies):

	June 30,		December 31,
	2019		2018
Cash and cash equivalents	$	14,653	$	16,715
IVA and other receivables		13,276		9,146
Prepaids		8,800		-
Total current assets		36,729		25,861
Right-of-use asset		12		-
Minerals, surface rights, exploration & development expenditures		190,856		161,975
Total assets	$	227,597	$	187,836
Payables to Peñoles and other vendors	$	10,414	$	5,736
Total current liabilities		10,414		5,736
Lease liability		13		-
Provision for reclamation and remediation costs		481		450
Deferred income tax liability		5,113		6,515
Total liabilities		16,021		12,701
Shareholders equity		211,576		175,135
Total liabilities and equity	$	227,597	$	187,836

18

MAG SILVER CORP.

Notes to the Condensed Interim Consolidated Financial Statements

For the three and six months ended June 30, 2019 and 2018

(Expressed in thousands of US dollars unless otherwise stated)

	June 30,		December 31,
	2019		2018
Income for the period before income tax	$	336	$	80
Deferred income tax benefit		1,396		436
Income for the period	$	1,732	$	516
MAG's 44% equity pick up	$	762	$	227

Evaluation and exploration expenditures and initial development expenditures, capitalized directly by Minera Juanicipio for the six months ended June 30, 2019 amounted to $28,881 (June 30, 2018: $18,494).

Income in Minera Juanicipio includes interest income and exchange gains and losses. There are no direct operating expenses in Minera Juanicipio, as all mineral, surface rights, and exploration and development expenditures are capitalized until commercial production is achieved.

7. EXPLORATION AND EVALUATION ASSETS

(a) In 2017, the Company entered into an option earn-in agreement with a private group whereby the Company can earn up to a 100% interest in a prospective land claim package. To earn a 100% interest in the property package, the Company must make combined remaining cash payments of $350 over the third, fourth and fifth annual anniversaries of the agreement, and the vendors would retain a 2% net smelter returns royalty (“NSR”). There are no further exploration funding requirements under the agreement as at June 30, 2019.

(b) In late 2018, the Company entered into an option agreement with another private group whereby the Company has the right to earn 100% ownership interest in a company which owns a prospective land claim package. The Company paid $150 upon signing the agreement. To earn 100% interest in the property, the Company must make combined remaining cash payments of $1,850 over the next 10 years, and fund a cumulative of $30,000 of eligible exploration expenditures ($881 incurred to June 30, 2019) by the tenth anniversary date of the agreement. Included in these commitments, is a remaining firm commitment of $369 of eligible exploration expenditures to be expended by December 21, 2019. As at June 30, 2019, the Company also recorded a provision of $260 for a reclamation liability assumed as a result of environmental rehabilitation associated with the project. Other than the firm commitments and reclamation liability, the balance of cash payments and exploration commitments are optional at the Company’s discretion. Upon the Company’s 100% earn-in, the vendors would retain a 2% NSR.

To June 30, 2019, the Company has incurred the following exploration and evaluation expenditures on these earn-in projects:

19

MAG SILVER CORP.

Notes to the Condensed Interim Consolidated Financial Statements

For the three and six months ended June 30, 2019 and 2018

(Expressed in thousands of US dollars unless otherwise stated)

	Three months ended		Six months ended		Year ended
	June 30, 2019		June 30, 2019		December 31, 2018
Exploration and evaluation assets:
Acquisition costs
Option payments	$	75	$	75	$	150
Reclamation obligation		260		260		-
Acquisition costs for the period		335		335		150
Geochemical		3		18		125
Camp and site costs		85		95		58
Geological consulting		427		691		1,086
Geophysical		-		2		93
Land taxes and government fees		-		5		445
Legal, community and other consultation costs		79		110		109
Travel		45		72		149
Total for the period		974		1,328		2,215
Balance, beginning of period		4,002		3,648		1,433
Balance, end of period	$	4,976	$	4,976	$	3,648

Included in exploration and evaluation assets at June 30, 2019 are trade and other payables of $70 (June 30, 2018: $81) and a reclamation obligation of $260 (June 30, 2018: nil), both non-cash investing activities.

The Company also holds mineral property concessions to the Cinco de Mayo property in Mexico, upon which a full impairment has been recognized in prior years. As a result, expenditures incurred to maintain these concessions and to potentially restore surface access, are no longer capitalized as exploration and evaluation assets, but rather are expensed as part of ‘mining taxes and other property costs’ on the statement of loss and comprehensive loss.

8. PROPERTY AND EQUIPMENT AND LEASES

As at June 30, 2019, the Company had the following property and equipment:

	June 30.		December 31,
	2019		2018
Office and computer equipment	$	40	$	35
Right of use asset (see Leases below)		504		-
Total property and equipment	$	544	$	35

LEASES

On adoption of IFRS 16, the Company recognized a right-of-use asset in relation to an office lease which had previously been classified as ‘operating lease’ under the principles of IAS 17. The right-of-use asset was recognized based on the amount equal to the lease liability, adjusted for accrued lease payments previously recognized. Upon transition to IFRS 16, the Company recognized $92 right-of-use asset and $127 lease obligation. The net of tax difference between right-of-use asset and lease obligation on transition of $34 was recorded as a retained earnings adjustment on January 1, 2019.

20

MAG SILVER CORP.

Notes to the Condensed Interim Consolidated Financial Statements

For the three and six months ended June 30, 2019 and 2018

(Expressed in thousands of US dollars unless otherwise stated)

a) Right-of-Use Asset (Office Lease)

As at June 30, 2019, the Company recorded $504 of right-of-use asset as part of property and equipment:

	Right-of-Use Asset
Net book value as at December 31, 2018	$	-
IFRS 16 transition adjustment on January 1, 2019 (see Note 2)		93
Additions		457
Depreciation		(46	)
Net book value, June 30, 2019	$	504

b) Lease obligation

Minimum lease payments in respect of lease obligation and the effect of discounting are as follows:

	June 30,
	2019
Undiscounted minimum lease payments
Less than one year	$	140
Two to three years		289
Four to five years		301
Thereafter		78
		808
Effect of discounting		(237	)
Present value of minimum lease payments - total lease obligation		571
Less: current portion		(70	)
Long-term lease obligation	$	501

For the three and six months ended June 30, 2019, the Company recognized $18 and $31 respectively, of interest expense on lease obligation included in ‘General Office Expense’ (June 30, 2018: nil and nil respectively).

9. SHARE CAPITAL

(a) Issued and outstanding

The Company is authorized to issue an unlimited number of common shares without par value.

As at June 30, 2019, there were 86,384,238 shares outstanding (June 30, 2018: 85,539,476).

During the six months ended, June 30, 2019, 333,500 stock options were exercised for cash proceeds of $1,978. An additional 710,000 stock options were exercised under a less dilutive cashless exercise provision of the plan, whereby 384,507 shares were issued in settlement of the stock options, and the remaining 325,493 options were cancelled.

During the year ended December 31, 2018, no stock options were exercised for cash and 135,000 stock options were exercised under a less dilutive cashless exercise provision of the plan, whereby 58,191 shares were issued in settlement of the stock options and the remaining 76,809 options were cancelled.

21

MAG SILVER CORP.

Notes to the Condensed Interim Consolidated Financial Statements

For the three and six months ended June 30, 2019 and 2018

(Expressed in thousands of US dollars unless otherwise stated)

During the six months ended June 30, 2019, 42,345 restricted share units, 24,244 performance share units and 60,166 deferred share units were converted into shares.

During the year ended December 31, 2018, 2,495 restricted share units were converted into shares.

(b) Stock options

The Company may enter into Incentive Stock Option Agreements with officers, employees, and consultants. On June 15, 2017, the Shareholders re-approved the Company’s rolling Stock Option Plan (the “Plan”). The maximum number of common shares that may be issuable under the Plan is set at 5% of the number of issued and outstanding common shares on a non-diluted basis at any time, provided that the number of common shares issued or issuable under the combined Plan and Share Unit Plan (Note 9(c)) shall not exceed 5% of the issued and outstanding common shares of the Company on a non-diluted basis. Options granted under the Plan have a maximum term of 5 years. As at June 30 2019, there were 1,439,318 stock options outstanding under the Plan.

Stock option grants are recommended for approval to the Board of Directors by the Compensation Committee consisting of three independent members of the Board of Directors. At the time of a stock option grant, the exercise price of each option is set and in accordance with the Plan, cannot be lower than the market value of the common shares at the date of grant.

The following table summarizes the Company’s option activity for the period:

				Weighted					Weighted
	Period ended			average		Year ended			average
	June 30,			exercise price		December 31,			exercise price
	2019			(C$/option)		2018			(C$/option)
Outstanding, beginning of period		2,134,294		$	9.59		2,269,294		$	9.50
Granted		367,967			13.46		-			-
Forfeited		(19,443	)		14.15		-			-
Exercised for cash		(333,500	)		7.98		-			-
Exercised cashless		(710,000	)		6.13		(135,000	)		7.94
Outstanding, end of period		1,439,318		$	12.60		2,134,294		$	9.59

During the six months ended June 30, 2019, 367,967 stock options were granted (June 30, 2018: nil) with a weighted average grant date fair value of $1,173 or $3.19 per option (June 30, 2018: nil).

The Company estimated the fair value of the option using the Black-Scholes option pricing model with the following weighted average assumptions:

22

MAG SILVER CORP.

Notes to the Condensed Interim Consolidated Financial Statements

For the three and six months ended June 30, 2019 and 2018

(Expressed in thousands of US dollars unless otherwise stated)

	June 30,	December 31,
	2019	2018
Risk-free interest rate	1.64%	0.94%
Expected volatility	44%	54%
Expected dividend yield	nil	nil
Expected life (years)	3	3

The expected volatility assumption was calculated with reference to the Company’s historical share price volatility up to the grant date to reflect a term approximate to the expected life of the option.

During the six months ended June 30, 2019, 1,043,500 stock options were exercised (June 30, 2018: 135,000) with a weighted average market share price at the date of exercise of C$13.22 (June 30, 2018: C$14.12).

The following table summarizes the Company’s stock options outstanding and exercisable as at June 30, 2019:

Exercise price		Number		Number		Weighted average remaining
($C/option)		outstanding		exercisable		contractual life (years)
	9.16		21,666		21,666		1.20
	9.28		368,333		368,333		1.43
	10.02		187,500		187,500		0.98
	13.46		357,404		-		4.79
	13.91		279,206		95,174		3.43
	17.55		225,209		151,849		2.43
	C$9.16 - C$17.55		1,439,318		824,522		2.75

During the six months ended June 30, 2019, the Company recorded share based payment expense of $488 (June 30, 2018: $455) relating to stock options vested to employees and consultants in the period.

(c) Restricted and performance share units

On June 15, 2017, the Shareholders re-approved a share unit plan (the “Share Unit Plan”) for the benefit of the Company’s officers, employees and consultants. The Share Unit Plan provides for the issuance of common shares from treasury, in the form of Restricted Share Units (“RSUs”) and Performance Share Units (“PSUs”). The maximum number of common shares that may be issuable under the Share Unit Plan is set at 1.5% of the number of issued and outstanding common shares on a non-diluted basis, provided that the number of common shares issued or issuable under the combined Share Unit Plan and Stock Option Plan (Note 9(b)) shall not exceed 5% of the issued and outstanding common shares on a non-diluted basis. RSUs and PSUs granted under the Share Unit Plan have a term of 5 years unless otherwise specified by the Board, and each unit entitles the participant to receive one common share of the Company subject to vesting criteria, and in the case of PSUs, performance criteria.

23

MAG SILVER CORP.

Notes to the Condensed Interim Consolidated Financial Statements

For the three and six months ended June 30, 2019 and 2018

(Expressed in thousands of US dollars unless otherwise stated)

During the six months ended June 30, 2019, 10,000 RSUs were granted (June 30, 2018: nil) under the Company’s Share Unit Plan, with 3,334 vesting in 12 months from the grant date, and 3,333 vesting in each of 24 and 36 months from the date of grant, all with a five-year term. The RSUs had a grant date fair value of $10.10 per RSU (June 30, 2018: nil) as determined using the fair market value of the common shares on the date of grant. In the six months ended June 30, 2019, 42,345 RSUs (June 30, 2018: 2,495) were converted and settled in common shares.

During the six months ended June 30, 2019, 91,406 PSUs were granted (June 30, 2018: nil) under the Company’s Share Unit Plan, which vest after three years of service from the date of grant. The number of PSUs to vest is subject to a market share price performance factor measured over a three-year performance period, resulting in a PSU payout range from 0% or nil PSUs to 200% or 182,812 PSUs. The Company estimates the fair value of the PSUs on grant date using the Monte Carlo simulation model. During the six months ended June 30, 2019, 24,244 PSUs were converted and settled in common shares (June 30, 2018: nil).

As at June 30, 2019, there were 10,998 RSUs and 252,821 PSUs issued and outstanding under the Share Unit Plan, of which 998 RSUs and 4,907 PSUs had vested and are convertible into common shares of the Company. Included in the PSUs at June 30, 2019, are 247,914 PSUs with vesting conditions subject to a market share price performance factor measured over a three-year performance period, resulting in a PSU payout range from 0% or nil PSUs to 200% or 495,828 PSUs.

The Company recognized a share-based payment expense of $284 (June 30, 2018: $298) relating to RSUs and PSUs vesting in the period.

(d) Deferred share units

On June 15, 2017, the Shareholders re-approved a Deferred Share Unit Plan (the “DSU Plan”) for the benefit of the Company’s non-executive directors. The DSU Plan provides for the issuance of common shares from treasury, in the form of Deferred Share Units (“DSUs”). Directors may also elect to receive all or a portion of their annual retainer and meeting fees in the form of DSUs. DSUs may be settled in cash or in common shares issued from treasury, as determined by the Board at the time of the grant. The maximum number of common shares that may be issuable under the DSU Plan is set at 1.0% of the number of issued and outstanding common shares on a non-diluted basis.

During the six months ended June 30, 2019, 141,386 DSUs were granted under the plan (June 30, 2018: nil) related to both 2018 and 2019 director DSU grants. In addition, 17,226 DSUs (June 30, 2018: nil) were granted to directors who elected to receive all or a portion of their annual retainer and meeting fees in the form of DSUs rather than cash. A DSU share-based payment expense of $736 was recognized in the six months ended June 30, 2019 (June 30, 2018: $58). Under the DSU plan, no common shares are to be issued, or cash payments made to, or in respect of a participant in the DSU Plan prior to such eligible participant’s termination date. In the six months ended June 30, 2019, after a director did not stand for re-election to the board, 60,166 DSUs were converted into shares. As at June 30, 2019, there are 551,185 DSUs issued and outstanding under the DSU Plan, all of which have vested.

24

MAG SILVER CORP.

Notes to the Condensed Interim Consolidated Financial Statements

For the three and six months ended June 30, 2019 and 2018

(Expressed in thousands of US dollars unless otherwise stated)

As at June 30, 2019, there are 2,254,322 common shares issuable under the combined share compensation arrangements referred to above (the Plan, the Share Unit Plan and the DSU Plan) representing 2.61% of the issued and outstanding common shares on a non-diluted basis, and there are 2,928,732 share-based awards available for grant under these combined share compensation arrangements.

10. Capital risk management

The Company’s objectives in managing its liquidity and capital are to safeguard the Company’s ability to continue as a going concern and to provide financial capacity to meet its strategic objectives. The capital structure of the Company consists of its equity (comprising of share capital, equity reserve, accumulated other comprehensive income and deficit), net of cash and cash equivalents.

Capital as defined above is summarized in the following table:

	June 30,			December 31,
	2019			2018
Equity	$	216,252		$	213,881
Cash and cash equivalents		(113,833	)		(130,180	)
	$	102,419		$	83,701

The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust the capital structure, the Company may attempt to issue new shares, issue debt, acquire or dispose of assets.

In order to facilitate the management of its capital requirements, the Company prepares annual expenditure budgets that are updated as necessary depending on various factors, including successful capital deployment and general industry conditions. The annual and updated budgets are approved by the Board of Directors. The Company currently does not pay out dividends.

As at June 30, 2019, the Company does not have any long-term debt and is not subject to any externally imposed capital requirements.

The Company currently has sufficient working capital ($114,326 as at June 30, 2019) to maintain all of its properties and currently planned programs for a period in excess of the next year. In management’s opinion, the Company is able to meet its ongoing current obligations as they become due. However, the Company may require additional capital in the future to meet its future project and other related expenditures (see Note 15) as the Company is currently not generating any cash flow from operations. Future liquidity may therefore depend upon the Company’s ability to arrange debt or additional equity financings.

11. Financial risk management

The Company’s operations consist of the acquisition, exploration and development of projects primarily in the Americas. The Company examines the various financial risks to which it is exposed and assesses the impact and likelihood of occurrence. These risks may include credit risk, liquidity risk, currency risk, interest rate risk and other price risks. Where material, these risks are reviewed and monitored by the Board of Directors.

25

MAG SILVER CORP.

Notes to the Condensed Interim Consolidated Financial Statements

For the three and six months ended June 30, 2019 and 2018

(Expressed in thousands of US dollars unless otherwise stated)

(a) Credit risk

Counterparty credit risk is the risk that the financial benefits of contracts with a specific counterparty will be lost if a counterparty defaults on its obligations under the contract. This includes any cash amounts owed to the Company by those counterparties, less any amounts owed to the counterparty by the Company where a legal right of set-off exists and also includes the fair values of contracts with individual counterparties which are recorded in the financial statements.

(i)       Trade credit risk

The Company is in the exploration stage and has not yet commenced commercial production or sales. Therefore, the Company is not exposed to significant trade credit risk and overall the Company’s credit risk has not changed significantly from December 31, 2018.

(ii)       Cash

In order to manage credit and liquidity risk the Company’s policy is to invest only in highly rated investment grade instruments backed by Canadian commercial banks.

(iii)        Mexican value added tax

As at June 30, 2019, the Company had a receivable of $58 from the Mexican government for value added tax (Note 4). Management expects the balance to be fully recoverable within the year.

The Company’s maximum exposure to credit risk is the carrying value of its cash and cash equivalents, and accounts receivable, as follows:

	June 30,		December 31,
	2019		2018
Cash and cash equivalents	$	113,833	$	130,180
Accounts receivable (Note 4)		261		372
	$	114,094	$	130,552

(b) Liquidity risk

The Company has a planning and budgeting process in place to help determine the funds required to support the Company's normal operating requirements, its exploration and development plans, and its various optional property and other commitments (see Notes 7 and 15). The annual budget is approved by the Board of Directors. The Company ensures that there are sufficient cash balances to meet its short-term business requirements.

The Company's overall liquidity risk has not changed significantly from the prior year.

26

MAG SILVER CORP.

Notes to the Condensed Interim Consolidated Financial Statements

For the three and six months ended June 30, 2019 and 2018

(Expressed in thousands of US dollars unless otherwise stated)

(c) Currency risk

The Company is exposed to the financial risks related to the fluctuation of foreign exchange rates, both in the Mexican peso and Canadian dollar, relative to the US$. The Company does not use any derivative instruments to reduce its exposure to fluctuations in foreign exchange rates. The Company is also exposed to inflation risk in Mexico.

Exposure to currency risk

As at June 30, 2019, the Company is exposed to currency risk through the following assets and liabilities denominated in currencies other than the functional currency of the applicable entity: 

(in US$ equivalent)	Mexican peso			Canadian dollar
Cash	$	38		$	1,357
Accounts receivable		58			52
Prepaid		9			-
Investments		-			1,294
Accounts payable		(66	)		(130	)
Lease obligation		-			(571	)
Net assets exposure	$	39		$	2,002

Mexican peso relative to the US$

Although the majority of operating expenses in Mexico are both determined and denominated in US$, an appreciation in the Mexican peso relative to the US$ will slightly increase the Company’s cost of operations in Mexico related to those operating costs denominated and determined in Mexican pesos. Alternatively, a depreciation in the Mexican peso relative to the US$ will decrease the Company’s cost of operations in Mexico related to those operating costs denominated and determined in Mexican pesos.

An appreciation/depreciation in the Mexican peso against the US$ will also result in a gain/loss to the extent that the Company holds net monetary assets (liabilities) in pesos. Specifically, the Company's foreign currency exposure is comprised of peso denominated cash, prepayments and value added taxes receivable, net of trade and other payables. The carrying amount of the Company’s net peso denominated monetary assets at June 30, 2019 is 748 pesos (June 30, 2018: 7,775). A 10% appreciation in the peso against the US$ would result in a gain at June 30, 2019 of $4 (June 30, 2018: $39), while a 10% depreciation in the peso relative to the US$ would result in an equivalent loss.

Mexican peso relative to the US$ - Investment in Associate

The Company also conducts a portion of its business through its equity interest in its associate, Minera Juanicipio (see Note 6). The Company accounts for this investment using the equity method, and recognizes the Company's 44% share of earnings and losses of Minera Juanicipio. Minera Juanicipio also has a US$ functional currency, and is exposed to the same currency risks noted above for the Company.

27

MAG SILVER CORP.

Notes to the Condensed Interim Consolidated Financial Statements

For the three and six months ended June 30, 2019 and 2018

(Expressed in thousands of US dollars unless otherwise stated)

An appreciation/depreciation in the Mexican peso against the US$ will also result in a gain/loss in Minera Juanicipio to the extent that it holds net monetary assets (liabilities) in pesos, comprised of peso denominated cash, value added taxes receivable, net of trade and other payables. The carrying amount of Minera Juanicipio’s net peso denominated monetary assets at June 30, 2019 is 503,894,000 pesos (June 30, 2018: 130,702,000 pesos). A 10% appreciation in the peso against the US$ would result in a gain at June 30, 2019 of $2,391 (June 30, 2018: $345) in Minera Juanicipio, of which the Company would record 44% or $1,052 equity pick-up (June 30, 2018: $152), while a 10% depreciation in the peso relative to the US$ would result in an equivalent loss.

C$ relative to the US$

The Company is exposed to gains and losses from fluctuations in the C$ relative to the US$.

As general and administrative overheads in Canada are denominated in C$, an appreciation in the C$ relative to the US$ will increase the Company’s overhead costs as reported in US$. Alternatively, a depreciation in the C$ relative to the US$ will decrease the Company’s overhead costs as reported in US$.

An appreciation/depreciation in the C$ against the US$ will result in a gain/loss to the extent that MAG, the parent entity, holds net monetary assets (liabilities) in C$. The carrying amount of the Company’s net Canadian denominated monetary assets at June 30, 2019 is C$2,620 (June 30, 2018: C$4,770). A 10% appreciation in the C$ against the US$ would result in gain at June 30, 2019 of $200 (June 30, 2018: $362) while a 10% depreciation in the C$ relative to the US$ would result in an equivalent loss.

(d) Interest rate risk

The Company’s interest revenue earned on cash and cash equivalents is exposed to interest rate risk. A decrease in interest rates would result in lower relative interest income and an increase in interest rates would result in higher relative interest income.

12. FINANCIAL INSTRUMENTS AND FAIR VALUE DISCLOSURES

The Company’s financial instruments include cash and cash equivalents, accounts receivable, investments, trade and other payables and lease liability. The carrying values of cash and cash equivalents, accounts receivable, trade and other payables and lease liability reported in the consolidated statement of financial position approximate their respective fair values due to the relatively short-term nature of these instruments.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value hierarchy establishes three levels to classify the inputs to valuation techniques used to measure fair value as described below:

28

MAG SILVER CORP.

Notes to the Condensed Interim Consolidated Financial Statements

For the three and six months ended June 30, 2019 and 2018

(Expressed in thousands of US dollars unless otherwise stated)

Level 1: Unadjusted quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities.

Level 2: Observable inputs other than quoted prices in Level 1 such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical or similar assets and liabilities in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3: Unobservable inputs which are supported by little or no market activity.

The Company’s financial assets or liabilities as measured in accordance with the fair value hierarchy described above are:

	Six months ended June 30, 2019
	Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	113,833	$	-	$	-	$	113,833
Investments (Note 5)(1)		1,294		-		-		1,294
	$	115,127	$	-	$	-	$	115,127

	Year ended December 31, 2018
	Level 1		Level 2		Level 3		Total
Cash and cash equivalents	$	130,180	$	-	$	-	$	130,180
Investments (Note 5)(1)		1,742		39		-		1,781
	$	131,922	$	39	$	-	$	131,961

⁽¹⁾ The fair value of equity securities quoted in active markets, is determined based on a market approach reflecting the closing price of each particular security as at the statement of financial position date. The closing price is a quoted market price obtained from the exchange that is the principal active market for the particular security, and therefore equity securities are classified within Level 1 of the fair value hierarchy. The fair values of equity securities and warrants that are not quoted in active markets are valued based on quoted prices of similar instruments in active markets or using valuation techniques where all inputs are directly or indirectly observable from market data and are classified within Level 2 of the fair value hierarchy.

There were no transfers between levels 1, 2 and 3 during the six months ended June 30, 2019 or during the year ended December 31, 2018.

13. SEGMENTED INFORMATION

The Company operates primarily in one operating segment, being the exploration and development of mineral properties in Mexico. The majority of the Company’s long-term assets are located there and the Company’s executive and head office is located in Canada.

29

MAG SILVER CORP.

Notes to the Condensed Interim Consolidated Financial Statements

For the three and six months ended June 30, 2019 and 2018

(Expressed in thousands of US dollars unless otherwise stated)

14. RELATED PARTY TRANSACTIONS

The Company does not have offices or direct personnel in Mexico, but rather is party to a Field Services Agreement, whereby it has contracted administrative and exploration services in Mexico with MINERA CASCABEL S.A. de C.V. (“Cascabel”) and IMDEX Inc. (“IMDEX”). Dr. Peter Megaw, the Company’s Chief Exploration Officer, is a principal of both IMDEX and Cascabel, and is remunerated by the Company through fees to IMDEX. In addition to corporate executive responsibilities with MAG, Dr. Megaw is responsible for the planning, execution and assessment of the Company’s exploration programs, and he and his team developed the geologic concepts and directed the acquisition of the Juanicipio Project.

During the period, the Company incurred expenses with Cascabel and IMDEX as follows:
	Three months ended June 30,				Six months ended June 30,
	2019		2018		2019		2018
Fees related to Dr. Megaw:
Exploration and marketing services	$	62	$	68	$	136	$	135
Travel and expenses		25		19		45		46
Other fees to Cascabel and IMDEX:
Administration for Mexican subsidiaries		14		18		31		36
Field exploration services		73		111		161		206
	$	174	$	216	$	373	$	423

All transactions are incurred in the normal course of business, and are negotiated on terms between the parties which are believed to represent fair market value for all services rendered. A portion of the expenditures are incurred on the Company’s behalf, and are charged to the Company on a “cost + 10%” basis. The services provided do not include drilling and assay work which are contracted out independently from Cascabel and IMDEX. Included in trade and other payables at June 30, 2019 is $88 related to these services (June 30, 2018: $179).

Any amounts due to related parties arising from the above transactions are unsecured, non-interest bearing and are due upon receipt of invoices.

The Company holds various mineral property claims in Mexico upon which full impairments have been recognized. The Company is obligated to a 2.5% NSR royalty on the Cinco de Mayo property payable to the principals of Cascabel under the terms of an option agreement dated February 26, 2004, whereby the Company acquired a 100% interest in the property from Cascabel, and under the terms of assignment agreements entered into by Cascabel with its principals.

The immediate parent and ultimate controlling party of the consolidated group is MAG Silver Corp. (incorporated in British Columbia, Canada).

The details of the Company’s significant subsidiaries and ownership interests are as follows:

30

MAG SILVER CORP.

Notes to the Condensed Interim Consolidated Financial Statements

For the three and six months ended June 30, 2019 and 2018

(Expressed in thousands of US dollars unless otherwise stated)

Significant subsidiaries of the Company are as follows:
Name	Country of	Principal	MAG's effective interest
	Incorporation	Project	2019(%)	2018(%)
Minera Los Lagartos, S.A. de C.V.	Mexico	Juanicipio	100%	100%
Minera Pozo Seco S.A. de C.V.	Mexico	Cinco de Mayo	100%	100%

Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation and are not disclosed in this note.

Minera Juanicipio, S.A. de C.V. (“Minera Juanicipio”), created for the purpose of holding and operating the Juanicipio Property, is held 56% by Fresnillo plc (“Fresnillo”) and 44% by the Company through Minera Los Lagartos, S.A. de C.V. Fresnillo is the operator of Minera Juanicipio, and with its affiliates, beneficially owns 11.3% of the common shares of the Company as at June 30, 2019, as publicly reported. Minera Juanicipio is currently governed by a shareholders agreement. All costs relating to the project and Minera Juanicipio are required to be shared by the Company and Fresnillo pro-rata based on their ownership interests in Minera Juanicipio (see Note 6).

During the period, compensation of key management personnel (including directors) was as follows:
	Three months ended June 30,					Six months ended June 30,
	2019			2018		2019		2018
Salaries and other short term employee benefits	$	280		$	272	$	567	$	546
Share based payments (Note 9(b), (c ), and (d))		920	(1)		171		1,018		342
	$	1,200		$	443	$	1,585	$	888

⁽¹⁾ Includes a DSU grant of $675 where the comparable 2018 grant occurred after June 30, 2018, and is therefore not comparable to the prior period.

.

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Company, directly or indirectly, and consists of its Directors, the Chief Executive Officer and the Chief Financial Officer.

15. COMMITMENTS AND CONTINGENCIES

The following table discloses the contractual obligations of the Company and its subsidiaries as at June 30, 2019 for committed exploration work and committed other obligations.

31

MAG SILVER CORP.

Notes to the Condensed Interim Consolidated Financial Statements

For the three and six months ended June 30, 2019 and 2018

(Expressed in thousands of US dollars unless otherwise stated)

			Less than 1 year		1-3 Years		3-5 Years		More than 5 years
	Total		2019		2020-2021		2022-2023		2024 & over
Committed exploration expenditures	$	369	$	369	$	-	$	-	$	-
Minera Juanicipio (1)&(2)		-		-		-		-		-
Other commitments		149		76		73		-		-
Total Obligations and Commitments	$	518	$	445	$	73	$	-	$	-

1) Although the Company makes cash advances to Minera Juanicipio as cash called by the operator Fresnillo (based on approved Minera Juanicipio budgets), they are not contractual obligations. The Company intends, however, to continue to fund its share of cash calls and avoid dilution of its ownership interest in Minera Juanicipio.

2) According to the operator, Fresnillo, contractual commitments for processing equipment of $22,900 and for development contractors of $66,700 with respect to the Juanicipio Project on a 100% basis have been committed to as at June 30, 2019. As well, Minera Juanicipio has committed to an Engineering, Procurement and Construction Management contract with Fresnillo to oversee the mine construction and development; on a 100% basis, $35,200 remains committed through project completion..

The Company also has optional commitments for property option payments and exploration expenditures as outlined above in Exploration and Evaluation Assets. There is no obligation to make any of those payments or to conduct any work on its optioned properties. As the Company advances them, it evaluates exploration results and determines at its own discretion which option payments to make and which additional exploration work to undertake in order to comply with the funding requirements.

The Company could be subject to various investigations, claims and legal and tax proceedings covering matters that arise in the ordinary course of business activities. Each of these matters would be subject to various uncertainties and it is possible that some matters may be resolved unfavourably to the Company. Certain conditions may exist as of the date of the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company is not aware of any such claims or investigations, and as such has not recorded any related provisions and does not expect such matters to result in a material impact on the results of operations, cash flows and financial position.

16. INCOME TAXES

The deferred income tax benefit recognized in statement of loss is as follows:

	Three months ended June 30,					Six months ended June 30,
	2019		2018			2019		2018
Deferred income tax benefit (expense)	$	249	$	(1,300	)	$	568	$	(102	)
Total deferred income tax benefit (expense) for the period	$	249	$	(1,300	)	$	568	$	(102	)

32

MAG SILVER CORP.

Notes to the Condensed Interim Consolidated Financial Statements

For the three and six months ended June 30, 2019 and 2018

(Expressed in thousands of US dollars unless otherwise stated)

The $568 deferred tax benefit recognized for the six months ended June 30, 2019 (June 30, 2018: $102 deferred tax expense) is related to the reversal of the deferred tax liability that was set up at December 31, 2018 in relation to temporary differences between the book and tax base of its Mexican non-monetary assets. The tax base of these non-monetary assets is determined in a different currency (Mexican Peso) than the functional currency (US$), and changes in the exchange rate can give rise to temporary differences that result in deferred tax liability in accordance with IAS 12 Income Taxes. With the strengthening of the Mexican Pesos against the US$ from 19.66 Pesos/US$ on December 31, 2018 to 19.17 on June 30, 2019, a portion of the previously recognized deferred tax liability was reversed in the current period. The deferred tax expenses and the corresponding deferred income tax liabilities are non-cash items and will only be recognized once the Company’s exploration properties are developed and in production.

17. SUBSEQUENT EVENT

Subsequent to June 30, 2019, the Company advanced $17,820 to Minera Juanicipio, representing its 44% share of a $40,500 cash call to fund equipment purchases, the commencement of the process plant construction and further underground development on the Juanicipio property.

33

EX-99.2

Exhibit 99.2

	MAG Silver Corp. Management’s Discussion & Analysis For the three and six months ended June 30, 2019 and 2018
	Dated: August 12, 2019

A copy of this report will be provided to any shareholder who requests it.

VANCOUVER OFFICE Suite 770 800 W. Pender Street Vancouver, BC V6C 2V6 604 630 1399 phone 866 630 1399 toll free 604 681 0894 fax TSX: MAG NYSE American: MAG www.magsilver.com info@magsilver.com

MAG SILVER CORP.

Management’s Discussion & Analysis

For the three and six months ended June 30, 2019 and 2018

(expressed in thousands of US dollars except as otherwise noted)

The following Management’s Discussion and Analysis (“MD&A”) focuses on the financial condition and results of operations of MAG Silver Corp. (“MAG” or the “Company”) for the three and six months ended June 30, 2019 and 2018. It is prepared as of August 7, 2019 and should be read in conjunction with the audited consolidated financial statements of the Company for the years ended December 31, 2018 and 2017, together with the notes thereto which are available on SEDAR and EDGAR or on the Company website at www.magsilver.com.

All dollar amounts referred to in this MD&A are expressed in thousands of United States dollars (“US$”) unless otherwise stated. The functional currency of the parent, its Mexican subsidiaries and its investment in associate, is the US$.

The common shares of the company trade on the Toronto Stock Exchange and on the NYSE American Stock Exchange both under the symbol MAG. The Company is a reporting issuer in the Provinces of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Nova Scotia, New Brunswick, Prince Edward Island, and Newfoundland and Labrador, and is a reporting “foreign issuer” in the United States of America. The Company believes it is a Passive Foreign Investment Company (“PFIC”), as that term is defined in Section 1297 of the U.S. Internal Revenue Code of 1986, as amended. This classification may result in adverse tax consequences for U.S. holders of the Company’s common shares. For an explanation of these effects on taxation, U.S. shareholders and prospective U.S. holders of the Company’s common shares are encouraged to consult their own tax advisers.

Qualified Person

Unless otherwise specifically noted herein, all scientific or technical information in this MD&A, including assay results and reserve estimates, if applicable, is based upon information prepared by or under the supervision of, or has been approved by Dr. Peter Megaw, Ph.D., C.P.G., a Certified Professional Geologist who is a “Qualified Person” for purposes of National Instrument 43-101, Standards of Disclosure for Mineral Projects (“National Instrument 43-101” or “NI 43-101”). Dr. Megaw is not independent as he is an officer and a paid consultant of the Company (see Related Party Transactions below).

Cautionary Note Regarding Forward-Looking Statements

Certain information contained in this MD&A, including any information relating to the Company’s future oriented financial information are forward-looking statements within the meaning of the US Private Securities Litigation Reform Act of 1995 and applicable Canadian securities laws (collectively “forward-looking statements”). All statements in this MD&A, other than statements of historical facts are forward-looking statements, including statements regarding the anticipated time and capital schedule to production; expectations on the approval of the development of the project; estimated project economics, including but not limited to, mill recoveries, payable metals produced, production rates, payback time, capital and operating and other costs, Internal Rate of Return (“IRR”), anticipated life of mine, and mine plan; expected upside from additional exploration; expected capital requirements and adequacy of current working capital for the next year; and other future events or developments. Forward-looking statements are often, but not always, identified by the use of words such as “seek”, “anticipate”, “plan”, “continue”, “estimate”, “expect”, “may”, “will”, “project”, “predict”, “potential”, “targeting”, “intend”, “could”, “might”, “should”, “believe” and similar expressions. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from results projected in such forward-looking statements. Although MAG believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements including, but not limited to, commodities prices; changes in expected mineral production performance; unexpected increases in capital costs; exploitation and exploration results; continued availability of capital and financing; risks related to holding a minority investment interest in the Juanicipio Property; and general economic, market or business conditions. In addition, forward-looking statements are subject to various risks, including but not limited to operational risk; environmental risk; political risk; currency risk; capital cost inflation risk; that data is incomplete or inaccurate; the limitations and assumptions within drilling, engineering and socio-economic studies relied upon in preparing the 2017 PEA (as defined herein); and market risks. The reader is referred to the Company’s filings with the SEC and Canadian securities regulators for disclosure regarding these and other risk factors. There is no certainty that any forward-looking statement will come to pass and investors should not place undue reliance upon forward-looking statements. The Company does not undertake to provide updates to any of the forward-looking statements in this MD&A, except as required by law.

2

MAG SILVER CORP.

Management’s Discussion & Analysis

For the three and six months ended June 30, 2019 and 2018

(expressed in thousands of US dollars except as otherwise noted)

Assumptions have been made including, but not limited to, the Company’s ability to carry on its various exploration and development activities including project development timelines, the timely receipt of required approvals and permits, the price of the minerals produced, the costs of operating, exploration and development expenditures, the impact on operations of the Mexican Tax Regime, and the Company’s ability to obtain adequate financing. The Company cannot assure you that actual events, performance or results will be consistent with these forward-looking statements, and management’s assumptions may prove to be incorrect. The forward-looking statements in this MD&A speak only as of the date hereof and we do not assume any obligation to update forward-looking statements if circumstances or management’s beliefs, expectations or opinions should change other than as required by applicable law. There is no certainty that any forward-looking statement will come to pass and investors should not place undue reliance upon forward-looking statements.

Note regarding Non-GAAP Measures

This MD&A references a technical report which presents certain financial performance measures, including all in sustaining costs (“AISC”), cash cost and total cash cost that are not recognized or standardized measures under International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”), and therefore may not be comparable to data presented by other silver producers. The Company believes that these generally accepted industry measures are relevant indicators of potential operating performance. Non-GAAP financial performance measures should be considered together with other data prepared in accordance with IFRS. This MD&A contains non-GAAP financial performance measure information for a project under development incorporating estimated cost, pricing and other information that will vary over time as the project is developed and mined. It is therefore not practicable to reconcile these forward-looking non-GAAP financial performance measures to GAAP measures.

More information about the Company including its AIF and recent financial reports is available on SEDAR at www.sedar.com and on the U.S. Securities and Exchange Commission’s EDGAR website at www.sec.gov.

3

MAG SILVER CORP.

Management’s Discussion & Analysis

For the three and six months ended June 30, 2019 and 2018

(expressed in thousands of US dollars except as otherwise noted)

Cautionary Note to Investors Concerning Estimates of Indicated and Inferred Mineral Resources

This MD&A uses the terms "Indicated Mineral Resources” and “Inferred Mineral Resources".  MAG advises investors that although these terms are recognized and required by Canadian regulations (under National Instrument 43-101 Standards of Disclosure for Mineral Projects), the U.S. Securities and Exchange Commission does not recognize these terms.  Investors are cautioned not to assume that any part or all of the mineral deposits in these categories will ever be converted into reserves. In addition, "Inferred Mineral Resources" have a great amount of uncertainty as to their existence. It cannot be assumed that all or any part of an Inferred Mineral Resource will ever be upgraded to a higher category.  Under Canadian rules, estimates of Inferred Mineral Resources are considered too geologically speculative to have the economic considerations applied to them to enable them to be categorized as mineral reserves and, accordingly, Inferred Mineral Resources may not form the basis of feasibility or pre-feasibility studies, or economic studies except for a “Preliminary Economic Assessment” as defined under NI 43-101. Investors are cautioned not to assume that part or all of an Inferred Resource exists, or is economically or legally mineable.

1. DESCRIPTION OF BUSINESS

The Company is a Vancouver-based advanced stage exploration and development company that is focused on the acquisition, exploration and development of high-grade, district-scale projects located primarily in the Americas. The Company’s principal asset is a 44% interest in the Juanicipio joint venture (the “Juanicipio Project”) located in Mexico, which is now in the construction phase heading to production (see Juanicipio Project and Juanicipio Project Update below). The Company also owns a 100% interest in the Cinco de Mayo Project, also located in Mexico.

Juanicipio Project

The Company owns 44% of Minera Juanicipio S.A. de C.V. (“Minera Juanicipio”), a Mexican incorporated joint venture company, which owns the high-grade silver Juanicipio Project, located in the Fresnillo District, Zacatecas State, Mexico. The Company and Fresnillo plc (“Fresnillo”), which holds the remaining 56% of the joint venture, jointly approved project mine development on April 11, 2019 and expect to achieve commercial production in late 2020. The exploration, development and construction of the Juanicipio Project are all being carried out by the project operator, Fresnillo, although the Company participates in both board and Technical Committee meetings.

The Juanicipio Project consists of high-grade silver-gold-lead-zinc epithermal vein deposits. The principal vein, the Valdecañas Vein, is an en echelon system comprised of overlapping East and West Veins and several smaller vein splays – the term “Valdecañas Vein” is used to refer to this combined en echelon system. The Juanicipio Project mine development consists of over 21 kilometres (“km”) of underground development, associated underground and surface infrastructure, and with the recent formal joint Project approval by both partners, the plan for a 4,000 tonnes per day (“tpd”) processing plant. As well, ongoing exploration continues both on the Valdecañas Vein and on other prospective targets within the joint venture property boundaries.

Exploration and development programs for the Juanicipio Project are designed by the Minera Juanicipio Technical Committee which is represented by both partners, and approved by the Minera Juanicipio Board of Directors. Construction of the processing plant is under the guidance of an Engineering, Procurement and Construction Management (“EPCM”) contract entered into with Fresnillo to oversee the mine development. The Company’s share of project costs is funded primarily through its 44% interest in Minera Juanicipio, and to a lesser extent, incurred directly by the Company to cover expenses related to its own commissioned technical studies and analyses, as well as direct project oversight. Minera Juanicipio is governed by a shareholder’s agreement and corporate by-laws, pursuant to which each shareholder is to provide funding pro rata to its ownership interest, and if either party does not fund pro rata, their ownership interest will be diluted in accordance with the shareholders agreement.

4

MAG SILVER CORP.

Management’s Discussion & Analysis

For the three and six months ended June 30, 2019 and 2018

(expressed in thousands of US dollars except as otherwise noted)

Underground development commenced at the Juanicipio Project on October 28, 2013 and has focused primarily on advancing the ramp declines, ventilation raises, surface offices and the associated surface and underground infrastructure. With the drilling success on the Juanicipio Project from three drill programs undertaken in 2015 through early 2017 which resulted in initial delineation of the expanding Deep Zone (see ‘Juanicipio Resource’ below), along with the resulting project scope changes announced by Fresnillo and MAG in 2017, the previous project technical report became obsolete. As a result, MAG commissioned AMC Mining Consultants (Canada) Ltd. (“AMC”) to prepare a Resource Estimate and Preliminary Economic Assessment for the Juanicipio Project (collectively, the “2017 PEA”), which was completed according to the NI 43-101 Standards of Disclosure for Mineral Projects and announced by the Company on November 7, 2017 (see Press Release of said date), with the MAG Silver Juanicipio NI 43-101 Technical Report (Amended and Restated) filed on SEDAR on January 19, 2018.

The 2017 PEA incorporates major overall project upgrades highlighted by the delineation and provision for mining of greatly expanded Indicated and Inferred Mineral Resources in the recently discovered Deep Zone. The volume of these new base metal-rich Deep Zone Resources contributed to a significant expansion of project scope and enhancements to most aspects of the mine design. Truck hauling, shaft hoisting, and underground conveying, along with underground crushing of the mineralized rock are all projected to be utilized for delivering the mineralized rock to the surface processing plant. An underground winze (internal shaft) is planned to be sunk within the hangingwall of the Valdecañas Vein system, to hoist mineralized rock from lower levels of the mine to the underground crusher and conveying system from the 6th year (2026) after plant start-up (projected as 2020) onward. As envisioned in the 2017 PEA, the proposed process plant has a planned production rate of 4,000 tpd, and the plant and tailings storage facility will be located in newly acquired open, flat ground. It will include a SAG/Ball mill comminution circuit followed by sequential flotation to produce a silver-rich lead concentrate, a zinc concentrate and a gold-rich pyrite concentrate.

Based on the 2017 PEA, the Company views the Juanicipio Project as a robust, high-grade, high-margin underground silver project exhibiting low development risks. On April 11, 2019, both Minera Juanicipio shareholders (Fresnillo and MAG) jointly approved the project for formal mine development and construction (see Juanicipio Project Update below). Both shareholders are currently advancing money to build out this project with initial production scheduled for late 2020 according to the operator Fresnillo.

While the results of the 2017 PEA are promising, by definition a Preliminary Economic Assessment is preliminary in nature and includes Inferred Mineral Resources that are considered too geologically speculative to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability and there is no certainty that Mineral Resources will ever become Mineral Reserves. There can therefore be no certainty that the results in the 2017 PEA will be realized. In addition, the 2017 PEA was commissioned independently by MAG, and not by Minera Juanicipio. Fresnillo is the project operator and the actual development plan and timeline may be materially different. The scope, design and operating results of the Juanicipio Project may differ from the scope, design and results envisaged in the 2017 PEA (see ‘Risks and Uncertainties’ below).

5

MAG SILVER CORP.

Management’s Discussion & Analysis

For the three and six months ended June 30, 2019 and 2018

(expressed in thousands of US dollars except as otherwise noted)

Cinco de Mayo Project

The Company owns 100% of the mineral concessions comprising the Cinco de Mayo Project. The property is located approximately 190 kilometres northwest of the city of Chihuahua, in northern Chihuahua State, Mexico, and covers approximately 25,113 hectares. The primary concessions of the Cinco de Mayo Project were acquired by way of an option agreement dated February 26, 2004, and the property remains subject to a 2.5% net smelter returns royalty (see Related Party Transactions below). The project consists of four major mineralized zones: the Upper Manto silver-lead-zinc inferred resource; the Pegaso deep discovery; the non-core Pozo Seco high grade molybdenum-gold resource; and the surrounding Cinco de Mayo exploration area. As the Company has been unable to negotiate a renewed surface access agreement with the local ejido, a full valuation impairment was recognized in the year ended December 31, 2016.

The Company believes that the Cinco de Mayo Project has significant geological potential and will continue to maintain its mineral concessions in good standing. Although efforts to regain surface access are ongoing, the Company has no current plans to conduct any geological exploration programs on the property.

2. HIGHLIGHTS – JUNE 30, 2019

ü Joint formal Juanicipio Project mine development approval by Fresnillo and MAG announced in the quarter (see Press Release dated April 11, 2019), and an EPCM contract finalized to oversee the mine development.

ü Progress on Juanicipio has been rapid with multiple engineering milestones delivered, and construction on track for H2-2020 commissioning target according to the operator Fresnillo.

ü Estimated pre-operative initial capital of $395,000 (100% basis) as of January 1, 2018, less development expenditures incurred since that date to June 30, 2019 of approximately $67,100 (Company therefore estimates approximately $327,900 of remaining initial capital on a 100% basis as at June 30, 2019).

ü MAG is well funded with cash and cash equivalents as at June 30, 2019 of $113,833 while Minera Juanicipio had working capital of $26,315 as at June 30, 2019.

ü Subsequent to quarter end, the Company advanced $17,820 to Minera Juanicipio, representing its 44% share of a $40,500 cash call to fund equipment purchases, the commencement of the process plant construction and further underground development on the Juanicipio property.

ü Underground development continues at Juanicipio and is now approaching 22 kilometres (or 13.7 miles) to date.

ü 46,060 metre (“m”) infill and step-out exploration drill program completed late in 2018 with assays announced in 2019 (see Press release dated March 4, 2019):

6

MAG SILVER CORP.

Management’s Discussion & Analysis

For the three and six months ended June 30, 2019 and 2018

(expressed in thousands of US dollars except as otherwise noted)

· Valdecañas Deep Zone expanded

§ Deep Zone West: Infill Hole P22 11.6 m (true width) grading 783 grams per tonne (“g/t”) (22.9 ounces per ton (“opt”)) silver, 2.57 g/t gold, 6.52% lead, 9.46% zinc, 0.32% copper.

§ Deep Zone East: Step-out Hole P26: 6.3m (true width) grading 246 g/t (7.2 opt) silver, 1.78 g/t (capped) gold, 7.20% lead, 11.63% zinc, 0.40% copper.

· “Pre-Anticipada” hangingwall vein discovered in step-out Hole P28: 3.2 m (estimated true width) grading 472 g/t (13.8 opt) silver, 0.31 g/t gold, 0.39% lead, 0.43% zinc and 0.03% copper.

· “Venadas Vein” discovered with unique North-East (“NE”) orientation: Hole VEN-1 cut 3.0 m (drilling width) grading 392 g/t (11.5 opt) silver & 5.6 g/t gold providing new Juanicipio exploration potential.

ü Significant exploration on the JV property continues given the recent successes:

· Four rigs currently drilling the deeper areas of the Valdecañas vein suite, and another rig is following up the discovery of the Venadas vein announced on March 4, 2019.

3. JUANICIPIO PROJECT UPDATE

Total Juanicipio Project expenditures incurred and capitalized directly by Minera Juanicipio (on a 100% basis) for the three and six months ended June 30, 2019 amounted to $18,788 and $28,881 respectively (June 30, 2018: $10,397 and $18,494 respectively). Of the total expenditures in the six months ended June 30, 2019, $26,479 (June 30, 2018: $16,186) are estimated to be development expenditures and the remaining $2,402 (June 30, 2018: $2,308) estimated as exploration expenditures.

MINE DEVELOPMENT APPROVAL – Juanicipio Project

On April 11, 2019, Fresnillo and MAG as shareholders of Minera Juanicipio, jointly announced formal approval of the Juanicipio mine development plan. The partners of Minera Juanicipio also finalized an EPCM agreement as part of the approval process which defines the specific terms by which Fresnillo will oversee the continued project development and the construction of the process plant and associated surface infrastructure. Orders have been placed and the manufacturing of the long lead items for the process plant is well advanced with deliveries expected late 2019 and early 2020. According to Fresnillo, good progress has been made on engineering and early stage construction, with multiple engineering milestones delivered, and construction on track for commissioning by H2-2020. The mill-site preparation is underway and the construction of surface infrastructure facilities continues.

Pre-operative initial capital is estimated on a 100% basis as $395,000 as of January 1, 2018, which does not reflect expenditures incurred since that date of approximately $67,100 to June 30, 2019, leaving an estimated $327,900 of remaining initial capital (MAG’s 44% remaining share estimated $144,276 as at June 30, 2019) (see Liquidity and Capital Resources below).  In addition, subsequent to June 30, 2019, the Company advanced $17,820 to Minera Juanicipio, representing its 44% share of a $40,500 cash call to fund equipment purchases, the commencement of the process plant construction and further underground development on the Juanicipio property.

An Operator Services agreement was also finalized by the partners in the project approval process which will become effective on commencement of commercial production. As well, both lead and zinc off-take agreements have been agreed to by the partners whereby both concentrates will be treated at market terms by Met-Mex Peñoles, S.A. De C.V., in Torreón, Mexico.

7

MAG SILVER CORP.

Management’s Discussion & Analysis

For the three and six months ended June 30, 2019 and 2018

(expressed in thousands of US dollars except as otherwise noted)

UNDERGROUND DEVELOPMENT – Juanicipio Project

Access to the mine will be via the completed twin underground declines that now have reached the top of mineralization in the Valdecañas Vein. From there, a footwall drift is being driven the length of the vein for which three internal spiral footwall production ramps will extend to depth. Twinning of the original access decline was required to provide expanded capacity for hauling additional mineralized rock and waste stemming from the planned increase in processing capacity to 4,000 tpd. The twin ramp was started in 2017 and completed in the second half of 2018 and is accessible through a second entry portal for the mine also completed in 2018. The twin ramps allow for streamlined underground traffic flow and increased safety through the mine having a second egress. The three spiral ramps into the mineralized envelope are designed to provide access to stopes within the mineralized material and were also required to facilitate the increase in planned mining rate to 4,000 tpd.

Mineralized material throughout the vein will be crushed underground and the crushed material conveyed directly from the crushing station (already excavated) to the process plant area via a third ramp which is being driven both from the surface and from the crushing chamber. This ramp will also provide access to the entire Valdecañas underground mining infrastructure and serve as a fresh air entry for the ventilation system.

Current underground development is now actively focused on:

· advancing the three internal spiral footwall ramps at depth to be used to further access the full strike length of the Valdecañas Vein system;

· constructing the underground crushing chamber;

· advancing the underground conveyor ramp to and from the planned surface processing facility from both faces;

· integrating additional ventilation and other associated underground infrastructure; and,

· sinking of the internal shaft – which has commenced whereby the head chamber for the shaft has been excavated, and winding equipment ordered.

The underground development metres achieved in the last 18 months (including approximately 3,277 metres in the six months ended June 30, 2019) accounts for almost half (approximately 47%) of the total underground development to June 30, 2019, and reflects an increased level of recent development activity. As at the date of this MD&A, total underground development is now approaching 22 kilometres (or 13.7 miles):

Period	Development Metres (excluding ventilation raises)	%age of total metres advanced achieved to date
Oct 28, 2013 – December 31, 2016	5,307	26%
January 1 – December 31, 2017	5,634	27%
January 1 – December 31, 2018	6,636	32%
January 1 – June 30, 2019	3,199	15%
Cumulative Total to June 30, 2019	20,776	100%

Concurrent with the ongoing underground development, detailed engineering continues for the internal shaft, other mine infrastructure, and the final process plant configuration.

8

MAG SILVER CORP.

Management’s Discussion & Analysis

For the three and six months ended June 30, 2019 and 2018

(expressed in thousands of US dollars except as otherwise noted)

A photo gallery of current progress on the Juanicipio development is available at http://www.magsilver.com/s/PhotoGallery.asp

EXPLORATION – Juanicipio Project

To date in 2019, 18 drill holes have been completed, 11 being infill holes and 7 exploration holes (all assays pending). Prior drilling designed to both convert the Inferred Resources included in the Deep Zone into Indicated Resources, and to further trace the Deep Zone laterally and to depth, was ongoing through 2018, with assays from 48-holes (46,060 m) completed in late 2018 reported in the previous quarter (see Press Release dated March 4, 2019).

Valdecañas Deep Zone expanded and significant new hangingwall vein discovered

The March 4, 2019 drill results extend and confirm continuity to depth of high-grade mineralization in the East and West Valdecañas Vein Deep Zones and in the Anticipada Vein. Drilling also coincidentally discovered the new Pre-Anticipada vein in the hangingwall above the system.

Intercepts included:

DEEP ZONE WEST: Infill Hole P22: 11.6 m (true width) grading 783 g/t (22.9 opt) silver, 2.57 g/t gold, 6.52% lead, 9.46% zinc, 0.32% copper.

DEEP ZONE EAST: Step-Out Hole P26: 6.3m (true width) grading 246 g/t (7.2 opt) silver, 1.78 g/t (capped) gold, 7.20% lead, 11.63% zinc, 0.40% copper.

ANTICIPADA VEIN: Infill Hole P24-1: 6.2 m (true width) grading 275 g/t (8 opt) silver, 4.02 g/t gold, 7.28% lead, 9.24% zinc and 0.30% copper.

NEW DISCOVERY — "PRE-ANTICIPADA VEIN”: Step-out Hole P28: 3.2 m (estimated true width) grading 472 g/t (13.8 opt) silver, 0.31 g/t gold, 0.39% lead, 0.43% zinc and 0.03% copper.

Since the discovery of the Deep Zone as an extension at depth of the high-grade Bonanza Zone (see ‘Juanicipio Resource’ above and Press Release April 23, 2015), the Valdecañas Vein System has emerged as a multi-stage, high-grade vein swarm comprising the overlapping East and West Veins, the hangingwall Anticipada Vein, the newly discovered Pre-Anticipada Vein and several other splays. The latest holes include the deepest lateral intercepts to date on the Valdecañas Vein, with deep mineralization now traceable continuously over a strike length exceeding 2,000 m and up to 1,100 m vertically from the top of the Bonanza Zone. Vein widths range from approximately 2 m to over 29 m. Deep mineralization on the Valdecañas Veins remains open laterally for several hundred metres to the claim boundaries on both ends; to the east claim boundary for Anticipada; and Pre-Anticipada and to depth across all veins (see http://www.magsilver.com/s/NewsReleases.asp?ReportID=846343 for diagrams).

Notably, the Valdecañas deep zones continue to demonstrate atypically high silver grades that MAG believes are ascribable to stacking or superimposition of a later mineralization stage related to a deeper, fluctuating boiling zone. Zinc and lead increase at depth as normally expected in the “root zone” of an epithermal vein, but copper grades are locally very high at depth, along with boron and high-temperature alteration minerals. Gold grades remain high and remarkably consistent from top to bottom. These phenomena, as interpreted, reflect proximity to a major mineralizing-fluid upwelling zone where multiple repeated pulses of mineralization combined to generate exceptionally high-grade polymetallic mineralization.

9

MAG SILVER CORP.

Management’s Discussion & Analysis

For the three and six months ended June 30, 2019 and 2018

(expressed in thousands of US dollars except as otherwise noted)

Valdecañas Vein West

Eleven new intercepts on the Valdecañas Vein West were also reported March 4, 2019 (See Table of drill assays at http://www.magsilver.com/s/NewsReleases.asp?ReportID=846343). Three fall within the Deep Zone Mineral Resource estimate (see ‘Juanicipio Resource’ above) and reinforce those results. The best is Hole P22, which cut 11.6 m (true width) grading 783 g/t (22.9 opt) silver, 2.57 g/t gold, 6.52% lead, 9.46% zinc, 0.32% copper in the heart of the Dilatant Zone (See Press Releases dated August 15, 2016 and February 14, 2017). Three more intercepts are high in the system and confirm the upper limits of the mineralized envelope (see “Shallow Holes” discussion below). The remaining five intercepts are 100 m step-outs designed to extend the resource envelope, the best being Hole P21, the westernmost deep hole on the Valdecañas Vein West. P21 cut 9.8 m (true width) grading 84 g/t (2.5 opt) silver, 2.74 g/t gold, 2.95% lead, 1.89% zinc, 0.11% copper. At the eastern extreme of this zone, Hole D6-1 cut 3.8 m (true width) grading 359 g/t (10.5 opt) silver, 0.09 g/t gold, 0.96% lead, 2.31% zinc, 1.68% copper. The Valdecañas West Deep Zone remains open to depth and laterally, especially to the southwest towards the claim boundary, which lies 200 - 300 m farther west.

Valdecañas Vein East

Twenty-four new intercepts were reported on March 4, 2019 from the Valdecañas Vein East (See Table of drill assays at http://www.magsilver.com/s/NewsReleases.asp?ReportID=846343). Six fall within the boundary of the Deep Zone Mineral Resource estimate (see ‘Juanicipio Resource’ above) and reinforce those results. The best of these is Hole TIV, which cut 4.8 m (true width) grading 278 g/t (8.1 opt) silver, 1.78 g/t gold (capped), 4.88% lead, 10.48% zinc, and 1.20% copper. Five more intercepts are high in the system and confirm the upper limits of the mineralized envelope. (see “Shallow Holes” discussion below). The remaining thirteen intercepts were 50 – 100 m step-outs designed to extend the Deep Zone Mineral Resource estimate envelope. Eight cut strong mineralization with the best being Hole P26, drilled under the middle of the zone, which cut 6.3 m (true width) grading 246 g/t (7.2 opt) silver, 1.78 g/t gold (capped), 7.20% lead, 11.63% zinc, 0.40% copper. Overall the Valdecañas East Deep Zone remains open to depth and laterally, especially in the middle; but it does appear to weaken towards the east at these depths. Hole VM-11 is an isolated hole drilled 200 m below the base of the Deep Zone Mineral Resource estimate. It hit thick but relatively weak mineralization in the Valdecañas Vein but did cut very strong mineralization in the Anticipada about 120 m uphole (see ‘Anticipada Vein “VANT”’ below).

Anticipada Vein “VANT”

Fourteen of the reported holes coincidentally cut the Anticipada Vein 50 to 100m before reaching their primary target: the Valdecañas Vein East Deep Zone (See Table of drill assays at http://www.magsilver.com/s/NewsReleases.asp?ReportID=846343). Seven fall within the boundary of the Deep Zone Mineral Resource estimate (see ‘Juanicipio Resource’ above) and significantly expand this vein, especially in a vertical zone along its western reaches. The best of these is Hole P24-1, which cut 6.2 m (true width) grading 275 g/t (8 opt) silver, 4.02 g/t gold, 7.28% lead, 9.24% zinc and 0.30% copper. The remaining seven holes were 50 to 100m step-outs that served to test the limits of the Deep Zone Mineral Resource estimate mineralized envelope. The three easterly intercepts show relatively weak mineralization but the four westernmost holes extend the strong vertical zone of high-grade mineralization mentioned above. The deepest of these (VM-11) cuts about 150m below the bottom of the Anticipada Vein and reported 2.0 m (true width) grading 146 g/t (4.3 opt) silver, 0.12 g/t gold, 2.40% lead, 17.32% zinc and 0.64% copper. This is the deepest and westernmost intercept in the Anticipada Vein, which remains open to depth and for several hundred metres towards the eastern property limit.

10

MAG SILVER CORP.

Management’s Discussion & Analysis

For the three and six months ended June 30, 2019 and 2018

(expressed in thousands of US dollars except as otherwise noted)

Pre-Anticipada Vein (2019 Discovery)

Sixteen of the holes that cut the Anticipada Vein on their way to the Valdecañas Vein East Deep Zone also encountered the previously unknown Pre-Anticipada Vein 50 - 100 m farther into the hangingwall (See Table of drill assays and figures at http://www.magsilver.com/s/NewsReleases.asp?ReportID=846343). The easternmost four appear to form a coherent zone with significant width and grade which is open 200 – 300 m to the east property boundary and to depth. The best hole is Hole P28, which cut 3.2 m (estimated true width) grading 472 g/t (13.8 opt) silver, 0.31 g/t gold, 0.39% lead, 0.43% zinc and 0.03% copper. Notably, Hole P19, 50 m deeper to the west reported 1256 g/t (36.7 opt) silver, a remarkable silver value for this depth in the system. Overall, the results for Pre-Anticipada show strong silver values with the best intercepts lying at an elevation between the base of the Bonanza Zone and the top of the Dilatant Zone of the Valdecañas Vein East Deep. These holes also report very low base metal values indicating a high-level position relative to the epithermal vein zoning model. It is possible that Pre-Anticipada represents mineralization related to the postulated deeper boiling zone emplaced into a structure separate from those that host the base metal rich roots of the earlier mineralization stage.

Both the Pre-Anticipada and Anticipada Veins are open to depth and for 200-300 m eastward to the property boundary.

Shallow Holes

Five holes (SA-1 to 4 and D8-1) were reported that were drilled to refine the upper limits of the Bonanza Zone in both the East and West Valdecañas veins. As expected, all five hit relatively narrow, silver-dominant mineralization except Hole SA-4 which cut 1.7 m (true thickness) grading 4341 g/t (126 opt) silver, 1.03 g/t gold, 3.14% lead, 5.81% zinc, 0.09% copper in the East Vein.

Venadas Vein discovery - New Juanicipio exploration potential

The discovery of the new Venadas Vein was also reported on March 4, 2019. The Venadas Vein is believed by the Company to be the first ever mineralized vein in the Fresnillo district oriented at a high angle (NE) to the historically mined northwest (“NW”) oriented veins. The NE-oriented Venadas Vein was inferred from the alignment of fifteen previously unconnected intercepts (See Table and Figures at http://www.magsilver.com/s/NewsReleases.asp?ReportID=846344) before being cut in an underground development working as a 1.1 m wide vein, reporting 116 g/t (3.4 opt) silver, 3.16 g/t gold. Hole VEN-1, the first drill hole specifically designed to test the Venadas Vein, cut 3.0 m (drilling width) grading 392 g/t (11.5 opt) silver and 5.54 g/t gold. All intercepts contain negligible base metals and lie above 1,750 m elevation, with most significantly higher than the top of the Valdecañas Vein at 1850 m elevation. This indicates a very high-level overall position in the vein zoning model, suggesting that Venadas has considerable depth potential.

Notably, other much larger NE structures with intense surface alteration are known farther afield within the Juanicipio property and are now priority exploration targets. None have ever been directly drilled.

11

MAG SILVER CORP.

Management’s Discussion & Analysis

For the three and six months ended June 30, 2019 and 2018

(expressed in thousands of US dollars except as otherwise noted)

Quality Assurance and Control: The samples (half core) are shipped directly in security-sealed bags to ALS-Chemex Laboratories preparation facility in Guadalajara, Jalisco, Mexico (Certification ISO 9001). Samples shipped also include intermittent standards and blanks. Pulp samples are subsequently shipped to ALS-Chemex Laboratories in North Vancouver, Canada for analysis. Two extra pulp samples are also prepared and are analyzed (in progress) by SGS Laboratories (Certification ISO 9001) and Inspectorate Laboratories (Certification ISO 9001) (or another recognized lab). The remaining half core is placed back into the core boxes and is stored on site with the rest of the drill hole core in a secured core storage facility. The bulk reject is subsequently sent to CIDT (Center for Investigation and Technical Development) of Peñoles in Torreon, Mexico for metallurgical testing where a fourth assay for each sample is analyzed and a calculated head grade is received on the basis of a concentrate balance. The CIDT also does a full microscopic, XRF and XRD mineralogical analysis.

4. JUANICIPIO RESOURCE

The Mineral Resource estimate included in the 2017 PEA was generated using a cut-off Net Smelter Return (“NSR”) value of $55/t and drilling data available up to December 31, 2016. This estimate, reported below on a 100% basis, has an effective date of October 21, 2017 (see Table 1) and reflects the results of both infill and exploration holes drilled in 2014 through 2016, with the greatest increase shown within the Deep Zone discovered in 2015. The Valdecañas Vein displays well the vertical mineralization gradations from upper silver-rich zones to deep base metal-dominant areas that are typical of Fresnillo District veins and epithermal silver veins in general. Because of this vertical compositional zonation, and significant dimensional increases with depth, the Mineral Resource estimate has been manually divided into the Bonanza Zone and the Deep Zone to highlight the definition of each zone.

Table 1: Juanicipio Project Mineral Resource estimate (100% basis) by zone (October 21, 2017):

Zone	Resource Category	Tonnes (Mt)	Ag (g/t)	Au (g/t)	Pb (%)	Zn (%)	Cu (%)	Ag (Moz)	Au (Koz)	Pb (Mlbs)	Zn (Mlbs)	Cu (Mlbs)
Bonanza Zone	Indicated	8.17	550	1.94	1.63	3.08	0.08	145	509	294	554	14
	Inferred	1.98	648	0.81	1.32	2.80	0.06	41	52	58	123	3
Deep Zone	Indicated	4.66	209	2.39	2.96	4.73	0.23	31	359	304	486	24
	Inferred	10.14	151	1.57	2.69	5.05	0.31	49	510	601	1,129	69

Notes:

1) 2014 CIM Definition Standards were used for reporting the Mineral Resources.

2) Mineral Resources are reported at a resource NSR cut-off value of $55/t.

3) The Mineral Resource estimate uses drill hole data available as of December 31, 2016.

4) Resource NSR values are calculated in US$ using factors of $0.61 per g/t Ag, $34.27 per g/t Au, $19.48 per % Pb, and $19.84 per % Zn. These factors are based on metal prices of $20/oz Ag, $1,300/oz Au $0.95/lb Pb, and $1.00/lb Zn and estimated recoveries of 82% Au, 95% Ag, 93% Pb, 90% Zn. The Mineral Resource NSR does not include offsite costs.

5) Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.

6) Totals may not add correctly due to rounding.

Approximately 78% of the total silver ounces in the Bonanza Zone are now classified as Indicated. The Resource Estimate included in the 2017 PEA significantly expanded the Inferred and Indicated resources in the base metal-rich Deep Zone and included a maiden copper resource.

12

MAG SILVER CORP.

Management’s Discussion & Analysis

For the three and six months ended June 30, 2019 and 2018

(expressed in thousands of US dollars except as otherwise noted)

5. OUTLOOK

While the Company’s principal focus is the successful development of the Juanicipio Project and to further explore the Juanicipio property, the Company continually looks to enhance its project portfolio by evaluating new available projects and through successful exploration of its current property holdings. The Company’s working capital position remains strong, and it continues to execute its business plan prudently, with on-going project evaluations focusing on potential high-grade, district scale properties.

Minera Juanicipio

As noted above, on April 11, 2019 Fresnillo and MAG as shareholders of Minera Juanicipio, jointly announced the formal approval of the Juanicipio mine development plan. Under the terms of an EPCM agreement, Fresnillo is now finalizing detailed engineering and is overseeing the construction of the process plant and associated surface infrastructure. Manufacturing of the long lead items for the process plant is well advanced, and deliveries are expected late 2019 and early 2020. According to Fresnillo, good progress has been made since the formal approval on engineering and early stage construction, with multiple engineering milestones delivered, and construction on track for commissioning by H2-2020.

Underground and other development actively continues with emphasis on: developing the three internal spiral footwall ramps at depth along the full strike length of the Valdecañas Vein system; constructing the underground crushing chamber; advancing the conveyor ramp from both ends to and from the planned mill site (with the box cut for the underground conveyor exit portal now complete); integrating additional ventilation and other associated underground infrastructure, starting of the internal shaft sinking (head chamber for the shaft has been excavated and winding equipment ordered), and progressing the construction of surface infrastructure facilities.

An Operator Services agreement has been negotiated and finalized by the partners which will become effective upon commercial production being achieved. As well, both lead and zinc off-take agreements have been agreed to by the partners with Met-Mex Peñoles, S.A. De C.V., whereby both the lead and zinc concentrates will be treated at market terms in Torreón, Mexico.

Both partners acknowledged that there is considerable further exploration opportunity in the license area with potential to scale-up operations in future beyond 4,000 tpd. The Juanicipio development is expected to create approximately 2,750 jobs during construction and 1,720 jobs once at full production.

There are currently five drill rigs on site. There are four on the Valdecañas Vein which are using Devico directional drilling technology and one conventional drill rig on the newly discovered Venadas Vein.

13

MAG SILVER CORP.

Management’s Discussion & Analysis

For the three and six months ended June 30, 2019 and 2018

(expressed in thousands of US dollars except as otherwise noted)

6. INVESTMENT IN ASSOCIATE

Minera Juanicipio

Minera Juanicipio is the corporate entity through which the Company records and holds its Investment in Associate (see Notes 2(b) and 6 in the unaudited condensed interim consolidated financial statements of the Company as at June 30, 2019).

	Three months ended June 30					Six months ended June 30
	2019		2018			2019		2018
Joint venture oversight expenditures incurred 100% by MAG	$	84	$	77		$	170	$	159
Cash contributions to Minera Juanicipio		15,272		-			15,272		5,653
Total for the current period		15,356		77			15,442		5,812
Equity pick up of current income (loss) for the period		480		(1,623	)		762		(740	)
Balance, beginning of period		81,582		63,692			81,214		57,074
Balance, end of period	$	97,418	$	62,146		$	97,418	$	62,146

During the three and six months ended June 30, 2019, the Company incurred Juanicipio oversight expenditures of $84 and $170 respectively (June 30, 2018: $77 and $159 respectively) and made joint venture cash advances to Minera Juanicipio of $15,272 (June 30, 2018: nil and $5,653 respectively) representing its 44% share of capital contributions made during the period.

In the three and six months ended June 30, 2019, the Company recorded an equity income pick up of $480 and $762 respectively from its Investment in Associate (June 30, 2018: $1,623 and $740 equity loss pick up respectively). The equity income for the periods represents the Company’s 44% share of investment income earned on cash balances, foreign exchange gains and a deferred income tax benefit recognized, all within Minera Juanicipio.

7. EXPLORATION AND EVALUATION ASSETS

Option Earn-in Projects

In 2017, the Company entered into an option earn-in agreement with a private group whereby the Company can earn up to a 100% interest in a prospective land claim package. To earn a 100% interest in the property package, the Company would have to make combined remaining cash payments of $350 over the third, fourth and fifth annual anniversaries of the agreement (all payments are at the option of the Company), and the vendors would retain a 2% net smelter returns royalty (“NSR”). There are no further exploration funding requirements under the agreement as at June 30, 2019.

In late 2018, the Company entered into an option agreement with another private group whereby the Company has the right to earn 100% ownership interest in a company which owns a prospective land claim package. The Company paid $150 upon signing the agreement. To earn 100% interest in the property, the Company must make combined cash payments of $1,850 over the next 10 years, and fund a cumulative of $30,000 of eligible exploration expenditures ($881 incurred to June 30, 2019) by the tenth anniversary date of the agreement.

All of the foregoing amounts are payable at the option of the Company except for a remaining firm commitment of $369 of eligible exploration expenditures to be expended by December 21, 2019. Upon the Company’s 100% earn-in, the vendors would retain a 2% NSR.

Cinco de Mayo Project

The Company owns 100% of the mineral concessions comprising the Cinco de Mayo Project, located in the northern part of Chihuahua State, Mexico. In late 2012, certain members of the local ejido challenged the Company’s surface right access to the property and have since prevented the Company from obtaining the surface access permission required as part of a Federal Government exploration permit process. With the continuing ejido impasse, in 2016 the Company recognized a full impairment charge relating to the property. Expenditures to maintain these claims and to potentially restore surface access, are no longer capitalized as exploration and evaluation assets. Rather they are expensed as part of ‘mining taxes and other property costs.’

14

MAG SILVER CORP.

Management’s Discussion & Analysis

For the three and six months ended June 30, 2019 and 2018

(expressed in thousands of US dollars except as otherwise noted)

The Company believes that the Cinco de Mayo Project has significant geological potential and will continue to maintain its mineral concessions in good standing. Efforts to restore surface access are ongoing, although the Company has no current plans to conduct any geological exploration programs on the property.

8. REVIEW OF FINANCIAL RESULTS

	Three months ended June 30,						Six months ended June 30,
	2019			2018			2019			2018
EXPENSES
Accounting and audit	$	85		$	95		$	143		$	163
Amortization		26			4			53			8
Filing and transfer agent fees		3			12			217			246
Foreign exchange (gain) loss		(43	)		47			3			77
General office expenses		310			297			480			495
Legal		51			55			137			163
Management compensation and consulting fees		501			460			1,077			934
Mining taxes and other property costs		57			113			353			482
Share based payment expense		1,284			407			1,508			811
Shareholder relations		110			132			214			272
Travel		67			91			135			172
		2,451			1,713			4,320			3,823
Interest income		782			783			1,626			1,465
Gain on sale of exploration and evaluation assets, net of transaction costs		-			1,151			-			1,151
Change in fair value of warrants		(21	)		(51	)		(39	)		(521	)
Equity pick up from associate		480			(1,623	)		762			(740	)
Loss for the period before income taxes	$	(1,210	)	$	(1,453	)	$	(1,971	)	$	(2,468	)
Deferred income tax benefit (expense)		249			(1,300	)		568			(102	)
Loss for the period	$	(961	)	$	(2,753	)	$	(1,403	)	$	(2,570	)

Three Months Ended June 30, 2019 vs Three Months Ended June 30, 2018

The Company’s net loss for the three months ended June 30, 2019 amounted to $961 (June 30, 2018: $2,753).

The Company adopted the new standard, IFRS 16 Leases, on January 1, 2019 which requires operating leases to be recognized on the balance sheet as right-of-use assets, resulting to an increase in amortization to $26 in the quarter ended June 30, 2019 (June 30, 2018: $4).

A foreign exchange gain of $43 was recorded in the quarter ended June 30, 2019 (June 30, 2018: $47 foreign exchange loss), resulting primarily from an exchange gain on Canadian dollar (“C$”) denominated cash held to fund Canadian corporate expenses. The C$ cash is exposed to exchange risk relative to the US$, and results in a gain or loss as the exchange rate fluctuates.

15

MAG SILVER CORP.

Management’s Discussion & Analysis

For the three and six months ended June 30, 2019 and 2018

(expressed in thousands of US dollars except as otherwise noted)

Mining taxes and other property costs decreased to $57 in the quarter ended June 30, 2019 (June 30, 2018: $113) due to the Company’s divestiture of several non-core concessions in the prior year.

Share based payment expense recorded in the quarter ended June 30, 2019 increased to $1,284 (June 30, 2018: $407), and is determined based on the fair value of equity incentives granted and vesting in the period. The increase is primarily due to DSUs granted in the period whereas the comparable prior period grant was recorded in a subsequent quarter. During the quarter ended June 30, 2019, the Company granted 367,967 stock options (June 30, 2018: nil), 10,000 restricted share units (“RSUs”) (June 30, 2018: nil), 91,406 performance share units (“PSUs”) (June 30, 2018: nil) and 141,386 deferred share units (“DSUs”) (June 30, 2018: nil) under the Company’s equity compensation plans. In addition, 17,226 DSUs were granted to directors who elected to receive all or a portion of their annual retainer and meeting fees in the form of DSUs rather than cash (June 30, 2018: nil).

Other expenses incurred during the quarter ended June 30, 2019 included accounting and audit fees of $85 (June 30, 2018: $95), filing & transfer agent fees of $3 (June 30, 2018: $12), general office expenses of $310 (June 30, 2018: $297), legal of $51 (June 30, 2018: $55), management compensation and consulting fees of $501 (June 30, 2018: $460), shareholder relations expenses of $110 (June 30, 2018: $132) and travel of $67 (June 30, 2018: $91) and were all either comparable with the prior period’s expense or the change was not significant to the overall operations during the quarter.

The Company also earned interest income on its cash and cash equivalents of $782 (June 30, 2018: $783) during the quarter ended June 30, 2019, and recorded its 44% equity income pick up of $480 (June 30, 2018: $1,623 equity loss pick up) from Minera Juanicipio as described above in Investment in Associate. In addition, the Company recorded an unrealized loss of $21 (June 30, 2018: $51) on warrants held and designated as fair value through profit and loss.

The Company recorded a deferred income tax benefit of $249 for the quarter ended June 30, 2019 (June 30, 2018: $1,300 deferred income tax expense) in relation to the change in temporary timing differences between the book and tax base of its Mexican non-monetary assets. The tax basis of these non-monetary assets is determined in a different currency (Mexican Peso) than the functional currency (US$), and changes in the exchange rate can give rise to temporary differences that result in deferred tax liability or benefit.

Six Months Ended June 30, 2019 vs. Six Months Ended June 30, 2018

The Company’s net loss for the six months ended June 30, 2019 amounted to $1,403 (June 30, 2018: $2,570).

As noted above, the Company adopted the new standard, IFRS 16 Leases, on January 1, 2019 resulting in an increase in amortization to $53 in the six months ended June 30, 2019 (June 30, 2018: $8).

A foreign exchange loss of $3 was recorded in the six months ended June 30, 2019 (June 30, 2018: $77) resulting primarily from holding C$ denominated cash, as noted above. The C$ cash is exposed to exchange risk relative to the US$, and results in a gain or loss as the exchange rate fluctuates.

Mining concession taxes and other property costs in the six months ended June 30, 2019 decreased to $353 (June 30, 2018: $482) due to the Company’s divestiture of several non-core concessions in the prior year. The remaining expenses relate primarily to expenditures on the Cinco de Mayo Project still maintained by the Company where full impairments have been previously recognized. Expenditures incurred on these properties are no longer capitalized as exploration and evaluation assets, and are expensed as part of ‘mining concession taxes and other property costs.’

16

MAG SILVER CORP.

Management’s Discussion & Analysis

For the three and six months ended June 30, 2019 and 2018

(expressed in thousands of US dollars except as otherwise noted)

Share based payment expense recorded in the six months ended June 30, 2019 increased to $1,508 (June 30, 2018: $811), as the Company granted equity incentives in the current period (June 30, 2018: nil) as noted above.

Other expenses incurred during the six months ended June 30, 2019 included accounting and audit of $143 (June 30, 2018: $163), filing & transfer agent fees of $217 (June 30, 2018: $246), general office expenses of $480 (June 30, 2018: $495), legal of $137 (June 30, 2018: $163), management compensation and consulting fees $1,077 (June 30, 2018: $934), shareholder relations expenses of $214 (June 30, 2018: 272) and travel of $135 (June 30, 2018: $172), and were all either comparable with the prior period’s expense or the change was not significant to the overall operations during the period.

In other income and expenses, the Company earned interest income on its cash and cash equivalents of $1,626 (June 30, 2018: $1,465) during the six months ended June 30, 2019, and recorded a 44% equity income pick up of $762 (June 30, 2018: $$740 equity loss pick up) from Minera Juanicipio as described above in Investment in Associate. In addition, the Company recorded an unrealized loss of $39 (June 30, 2018: $521) on warrants held and designated as fair value through profit and loss.

The Company recorded a deferred income tax benefit of $568 for the six months ended June 30, 2019 (June 30, 2018: $102 deferred income tax expense) in relation to temporary differences between the book and tax base of its Mexican non-monetary assets. The tax base of these non-monetary assets is determined in a different currency (Mexican Peso) than the functional currency (US$), and changes in the exchange rate can give rise to temporary differences that result in deferred tax liability or benefit.

Other Comprehensive Loss:

	Three months ended June 30,						Six months ended June 30,
	2019			2018			2019			2018
Loss for the period	$	(961	)	$	(2,753	)	$	(1,403	)	$	(2,570	)
OTHER COMPREHENSIVE LOSS
Items that will not be reclassified subsequently to profit or loss:
Unrealized loss on equity securities, net of taxes		(301	)		(239	)		(448	)		(1,334	)
Total comprehensive loss	$	(1,262	)	$	(2,992	)	$	(1,851	)	$	(3,904	)

In Other Comprehensive Loss (“OCI”) during three and six months ended June 30, 2019, the Company recorded an unrealized market loss of $301 and $448 respectively (June 30, 2018: $239 and $1,334 respectively) on equity securities held as strategic investments.

17

MAG SILVER CORP.

Management’s Discussion & Analysis

For the three and six months ended June 30, 2019 and 2018

(expressed in thousands of US dollars except as otherwise noted)

9. SUMMARY OF QUARTERLY RESULTS

The following table sets forth selected quarterly financial information for each of the last eight quarters (as determined under IFRS (expressed in US$000’s except Net Income (Loss) per Share):

Quarter Ending	Revenue (1)	Net Income (Loss) (2)	Net Income (Loss) per Share
June 30, 2019	$782	$(961)	$(0.01)
March 31, 2019	$844	$(442)	$(0.01)
December 31, 2018	$841	$(3,829)	$(0.04)
September 30, 2018	$812	$597	$0.01
June 30, 2018	$783	$(2,753)	$(0.03)
March 31, 2018	$682	$183	$ 0.00
December 31, 2017	$517	$(4,077)	$(0.05)
September 30, 2017	$460	$(786)	$(0.01)

Notes:

(1) The Company’s only source of revenue during the quarters listed above was interest earned on bank cash, cash equivalents and term deposits. The amount of interest revenue earned correlates directly to the amount of cash, cash equivalents and term deposits on hand during the period referenced and prevailing interest rates. At this time, the Company has no operating revenues.

(2) Net income (loss) by quarter is often materially affected by the timing and recognition of large non-cash expenses (specifically share based payments, exploration and evaluation property impairments, and deferred tax changes) as discussed above when applicable in “Review of Financial Results.”

10. CASH FLOWS

The following table summarizes the Company’s cash flow activities for the three and six months ended June 30, 2019:

	Three months ended June 30						Six months ended June 30
		2019			2018			2019			2018
Operations	$	(420	)	$	(470	)	$	(1,144	)	$	(1,473	)
Changes in non-cash working capital		(324	)		(248	)		(699	)		(884	)
Operating activities		(744	)		(718	)		(1,843	)		(2,357	)
Investing activities		(16,066	)		(521	)		(16,480	)		(6,568	)
Financing activities		1,963			-			1,941			-
Effects of exchange rate changes on cash and cash equivalents		73			(49	)		35			(66	)
Change in cash and cash equivalents during the period		(14,774	)		(1,288	)		(16,347	)		(8,991	)
Cash and cash equivalents, beginning of period		128,607			152,692			130,180			160,395
Cash and cash equivalents, end of period	$	113,833		$	151,404		$	113,833		$	151,404

Operating Activities

During the three and six months ended June 30, 2019, the Company used $420 and $1,144 in cash for operations before changes in non-cash working capital, compared to $470 and $1,473 respectively, in the three and six months ended June 30, 2018. The Company’s non-cash working capital (accounts receivable, prepaid expenses less trade and other payables) in the three and six months ended June 30, 2019 increased by $324 and $699 respectively (June 30, 2018: $248 and $884 respectively). The total use of cash from operating activities in the three and six months ended June 30, 2019 was $744 and $1,843 respectively (June 30, 2018: $718 and $2,357 respectively).

18

MAG SILVER CORP.

Management’s Discussion & Analysis

For the three and six months ended June 30, 2019 and 2018

(expressed in thousands of US dollars except as otherwise noted)

Investing Activities

During the three and six months ended June 30, 2019, the net cash used in investing activities amounted to $16,066 and $16,480 respectively (June 30, 2018: $521 and $6,568 respectively). The Company used cash to fund advances to Minera Juanicipio, which combined with MAG’s Juanicipio expenditures on its own account, totaled $15,375 and $15,456 respectively (June 30, 2018: $78 and $5,845 respectively). The increase in cash advances to Minera Juanicipio in the 2019 periods follows the production development decision in April 2019. The Company makes capital contributions through cash advances to Minera Juanicipio as ‘cash called’ by operator Fresnillo, based on approved joint venture budgets. In the three and six months ended June 30, 2019, the Company also expended $691 and $1,011 respectively (June 30, 2018: $389 and $669 respectively) on its other exploration and evaluation properties.

Financing Activities

In the three and six months ended June 30, 2019, 333,500 stock options were exercised for cash proceeds of $1,978 (June 30, 2018: nil).

In the three and six months ended June 30, 2019, 710,000 stock options (June 30, 2018: nil and 135,000 respectively) were exercised under a less dilutive cashless exercise provision of the plan whereby 384,507 shares (June 30, 2018: nil and 58,191 respectively) were issued and the remaining 325,493 stock options (June 30, 2018: nil and 76,809 respectively) were cancelled.

In the three and six months ended June 30, 2019, the net cash used in financing activities was to pay a lease obligation of $15 and $37 respectively (June 30: 2018: nil and nil respectively).

11. FINANCIAL POSITION

The following table summarizes the MAG Silver Corp.’s financial position as at:

19

MAG SILVER CORP.

Management’s Discussion & Analysis

For the three and six months ended June 30, 2019 and 2018

(expressed in thousands of US dollars except as otherwise noted)

	June 30, 2019		June 30, 2018
Cash and cash equivalents	$	113,833	$	151,404
Other current assets		949		826
Total current assets		114,782		152,230
Investments		1,294		2,443
Investment in associate		97,418		62,146
Exploration and evaluation assets		4,976		2,169
Property and equipment		544		42
Total assets	$	219,014	$	219,030
Current liabilties		456		465
Non-current liabilities		2,306		1,419
Total liabilities		2,762		1,884
Total equity		216,252		217,146
Total liabilities and equity	$	219,014	$	219,030

Total current assets decreased from $152,230 at June 30, 2018 to $114,782 as at June 30, 2019. Cash and cash equivalents totaled $113,833 at June 30, 2019 compared to $151,404 at June 30, 2018, with the change in cash discussed above in ‘Cash Flows’. Other current assets as at June 30, 2019 included prepaid expenses of $688 (June 30, 2018: $434) and accounts receivable of $261 (June 30, 2018: $392). The accounts receivable is comprised primarily of interest receivable on invested cash and cash equivalents, and value added refundable taxes.

Investments of $1,294 are comprised of equity securities held by the Company as strategic investments (June 30, 2018: $2,443 comprised of warrants and equity securities).

During the six months ended June 30, 2019, the Company capitalized $504 right-of-use asset (June 30, 2018: nil) which is included under property and equipment, and recorded a $571 lease obligation included in liabilities (June 30, 2018: nil) in compliance with IFRS 16 Leases that became effective at January 1, 2019.

The Investment in Associate balance increased from June 30, 2018 to June 30, 2019 from $62,146 to $97,418 and reflects the Company’s ongoing investment in Minera Juanicipio as discussed in ‘Investing Activities’ and ‘Investment in Associate’ both above. Exploration and evaluation assets as at June 30, 2019 increased to $4,976 (June 30, 2018: $2,169) reflecting exploration expenditures incurred on the properties described above in ‘Exploration and Evaluation Assets.’

Current liabilities at June 30, 2019 amounted to $456 (June 30, 2018: $465) and are attributable to accrued exploration and administrative expenses and the current portion of an IFRS 16 lease obligations recognized in 2019. Non-current liabilities of $2,306 (June 30, 2018: $1,419) include the non-current lease obligation of $501 (June 30, 2018: nil), a deferred income tax liability of $1,545 at June 30, 2019 (June 30, 2018: $1,419) resulting from temporary timing differences between the book and tax base of its Mexican non-monetary assets, and a $260 for reclamation provision (June 30, 2018: nil) assumed one of the Company’s exploration earn-in projects.

20

MAG SILVER CORP.

Management’s Discussion & Analysis

For the three and six months ended June 30, 2019 and 2018

(expressed in thousands of US dollars except as otherwise noted)

12. LIQUIDITY AND CAPITAL RESOURCES

As at June 30, 2019, the Company had working capital of $114,326 (June 30, 2018: $151,765) including cash and cash equivalents of $113,833 (June 30, 2018: $151,404). As well, as at June 30, 2019 Minera Juanicipio had working capital of $26,315 (MAG’s attributable 44% share $11,579) including a cash balance of $14,653 (MAG’s attributable 44% share $6,447). Other than an office lease obligation under IFRS 16, the Company currently has no debt and believes it has sufficient working capital to maintain all of its properties and currently planned programs for the next year. However, the Company is continually evaluating debt and equity financing alternatives, as it may require additional capital in 2020 and beyond to meet its project related expenditures, including its cash calls on the Juanicipio Project with respect to funding its 44% share of the project.

Funding of the Juanicipio Project Development

The initial capital expenditures for the project, inclusive of capitalized operating costs as estimated by AMC as of January 1, 2018 are $395,000 (MAG 44% $173,800) including all mine development-related costs to be incurred prior to the envisaged commencement of commercial operations in H2-2020. Capital costs incurred after start-up are assigned to sustaining capital and are projected to be paid out of operating cash-flows.

The above initial capital expenditure estimate does not represent the remaining initial capital expenditures as of the present date, as it does not reflect the capital expenditures incurred since January 1, 2018 which total approximately $67,100 to June 30, 2019. The Company therefore estimates the remaining initial capital expenditures to be approximately $327,900 (the Company’s 44% share $144,276 as at June 30, 2019). The Company may therefore need to raise additional capital in the future in order to meet its full share of initial capital required to develop the Juanicipio Project. It is unlikely that the Company will generate sufficient operating cash flow to fund such obligations, and accordingly, future liquidity will depend upon the Company’s ability to arrange debt or additional equity financings. The Company is currently evaluating several debt proposals and other financing alternatives. The inability of the Company to fund its 44% share of cash calls would result in dilution of the Company’s ownership interest in Minera Juanicipio in accordance with the shareholders’ agreement.

Actual vs Expected Use of Proceeds – Prior Financings

In the Company’s February 23, 2016 Prospectus Supplement to a Short Form Base Shelf Prospectus (the “Offering Document”), the Company provided the expected use of proceeds with respect to the offering. The table below provides a comparison of the Company’s estimated actual use of proceeds to date (including cash advanced for such purpose, but not necessarily expended yet at the project level), as compared to the use of proceeds presented in the Offering Document:

Intended Use of Proceeds	Expected Use of Proceeds February 23, 2016	Estimated Actual Use of Net Proceeds to date
	(000s of $US)	(000s of $US)
Exploration expenditures at the Juanicipio Property	$5,000	$5,000
Development expenditures at the Juanicipio Property	$50,000	$28,231
Development contingency at the Juanicipio Property	$7,500	$  -

21

MAG SILVER CORP.

Management’s Discussion & Analysis

For the three and six months ended June 30, 2019 and 2018

(expressed in thousands of US dollars except as otherwise noted)

The Company is still aligned and expending funds in accordance with the February 23, 2016 offering.

13. Contractual ObligationS

The following table discloses the contractual obligations of the Company and its subsidiaries as at June 30, 2019 for committed exploration work and other committed obligations.

			Less than 1 year		1-3 Years		3-5 Years		More than 5 years
	Total		2019		2020-2021		2022-2023		2024 & over
Committed exploration expenditures	$	369	$	369	$	–	$	–	$	–
Minera Juanicipio (1)&(2)		–		–		–		–		–
Other commitments		149		76		73		–		–
Total Obligations and Commitments	$	518	$	445	$	73	$	–	$	–

¹⁾ Although the Company makes cash advances to Minera Juanicipio as cash called by the operator Fresnillo (based on approved Minera Juanicipio budgets), they are not contractual obligations. The Company intends, however, to continue to fund its share of cash calls and avoid dilution of its ownership interest in Minera Juanicipio.

⁽²⁾ According to the operator, Fresnillo, contractual commitments for processing equipment of $22,900 and for development contractors of $66,700 with respect to the Juanicipio Project on a 100% basis have been committed to as at June 30, 2019. As well, Minera Juanicipio has committed to an EPCM contract with Fresnillo to oversee the mine construction and development; on a 100% basis, $35,200 remains committed through project completion.

The Company also has optional commitments for property option payments and exploration expenditures as outlined above in Exploration and Evaluation Assets. There is no obligation to make any of those payments or to conduct any work on its optioned properties. As the Company advances the projects, it evaluates exploration results and determines at its own discretion which option payments to make and which additional exploration work to undertake in order to comply with the earn-in requirements.

The Company may provide guarantees and indemnifications in conjunction with transactions in the normal course of operations. These are recorded as liabilities when reasonable estimates of the obligations can be made. Indemnifications that the Company has provided include an obligation to indemnify directors and officers of the Company for potential liability while acting as a director or officer of the Company, together with various expenses associated with defending and settling such suits or actions due to association with the Company. The Company has a comprehensive director and officers’ liability insurance policy that could mitigate such costs if incurred.

22

MAG SILVER CORP.

Management’s Discussion & Analysis

For the three and six months ended June 30, 2019 and 2018

(expressed in thousands of US dollars except as otherwise noted)

14. SHARE CAPITAL INFORMATION

The Company’s authorized capital consists of an unlimited number of common shares without par value. As at August 7, 2019, the following common shares, stock options, RSUs, PSUs and DSUs were outstanding:

	Number of	Exercise Price or	Remaining
	Shares	Conversion Ratio	Life
Capital Stock	86,384,502	n/a	n/a
Stock Options	1,436,161	$9.16 - $17.55	0.9 to 4.7 years
Performance Share Units(“PSUs”) (1)	252,821	1:1	1.3 to 4.7 years
Restricted Share Units(“RSUs”)	10,998	1:1	0.9 to 4.7 years
Deferred Share Units (“DSUs”) (2)	551,185	1:1	n/a (2)
Fully Diluted	88,635,667

⁽¹⁾ Includes three PSU grants of 69,085, 88,165 and 90,664 PSUs respectively, where vesting is subject to a market price performance factor, each measured over a three-year performance period to 2019 and 2022, respectively, which will result in a PSU payout range from 0% (nil PSUs) to 200% (495,828 PSUs).

⁽²⁾ To be share settled, but no common shares are to be issued in respect of a participant in the DSU Plan prior to such eligible participant’s termination date.

15. Other Item S

The Company is unaware of any undisclosed liabilities or legal actions against the Company and the Company has no legal actions or cause against any third party at this time other than the claims of the Company with respect to its purchase of 41 land rights within the Cinco de Mayo property boundaries, and the associated efforts to regain surface access with the local ejido.

The Company is unaware of any condition of default under any debt, regulatory, exchange related or other contractual obligation.

Tax Law for the State of Zacatecas.

On December 31, 2016, the State Government of Zacatecas, Mexico published a new Tax Law for the State (Ley de Hacienda del Estado de Zacatecas, the “Zacatecas Tax Law”), which came into effect on January 1, 2017. On February 11, 2019, the Supreme Court of Mexico issued a ruling regarding a specific constitutional issue presented by the former administration of the Federal Government, which challenged the ability of the State of Zacatecas to impose environmental taxes on aspects such as (i) extraction of rocks; (ii) emissions into the air; (iii) discharges of industrial residues, and (iv) disposal of industrial waste. The ruling of the Supreme Court establishes that, from a constitutional point of view, there is no express limitation granting the Mexican State at a Federal level the sole power to impose such taxes; therefore, the State of Zacatecas has a joint right to create these taxes. Notwithstanding the foregoing, the Court did not exhaust the analysis of the legality of each particular tax created by the State of Zacatecas.

Minera Juanicipio had previously challenged the legality of such taxes and in 2017 obtained an injunction from a Federal Court. The State of Zacatecas has appealed this ruling and the final result is pending.

As Minera Juanicipio’s operations are located in the State of Zacatecas, this tax, if upheld, will apply to the Juanicipio project, the effects of which have not been quantified. Managements’ assessment of this tax however, is that it will not have an impact on the viability of the Juanicipio Project.

23

MAG SILVER CORP.

Management’s Discussion & Analysis

For the three and six months ended June 30, 2019 and 2018

(expressed in thousands of US dollars except as otherwise noted)

Value Added Tax (“VAT”) also known as “IVA”

In Mexico, VAT is charged on the sale of goods, rendering of services, lease of goods and importation of the majority of goods and services at a rate of 16%. Proprietors selling goods or services must collect VAT on behalf of the government. Goods or services purchased incur a credit for VAT paid. The resulting net VAT is then remitted to, or collected from, the Government of Mexico through a formalized filing process.

The Company has traditionally held a VAT receivable balance due to the expenditures it incurs whereby VAT is paid to the vendor or service provider. Collections of these receivables from the Government of Mexico often take months and sometimes years to recover, but the Company has to date been able to recover all of its VAT paid.

Amendments were made to Mexican VAT legislation, effective January 1, 2017, that may impact the Company’s future ability to recover VAT paid after January 1, 2017. Although still subject to interpretation and confirmation of intent from the Mexican government, companies in a pre-operative/exploration stage may have to satisfy additional criteria in order to claim valid refunds. The Company’s VAT paid that falls into this category, is not material or significant to the Company’s overall operations.

The 2017 changes are not expected to have any material impact on Minera Juanicipio and its ability to recover VAT paid, given the expectation Minera Juanicipio will become a producing mine.

16. Trend InformatioN

As both the price and market for silver are volatile and difficult to predict, a significant decrease in the silver price and to a lesser extent gold, zinc and lead prices, could have an adverse material impact on the Company’s operations and market value.

The nature of the Company’s business is demanding of capital for property acquisition costs, exploration commitments, development and holding costs. The Company’s liquidity is affected by the results of its own acquisition, exploration and development activities. The acquisition or discovery of an economic mineral deposit on one of its mineral properties may have a favourable effect on the Company’s liquidity, and conversely, the failure to acquire or find one may have a negative effect. In addition, access to capital to fund exploration and development companies remains difficult in current public markets, which could limit the Company’s ability to meet its objectives.

Surface rights in Mexico are often owned by local communities or “ejidos” and there has been a trend in Mexico of increasing ejido challenges to existing surface right usage agreements. The Company has already been impacted by this recent trend at its Cinco de Mayo Project. Any further challenge to the access to any of the properties in which the Company has an interest may have a negative impact on the Company, as the Company may incur delays and expenses in defending such challenge and, if the challenge is successful, the Company’s interest in a property could be materially adversely affected.

Apart from these and the risks referenced below in “Risks and Uncertainties,” management is not aware of any other trends, commitments, events or uncertainties that would have a material effect on the Company’s business, financial condition or results of operations.

17. RISKS AND UNCERTAINTIES

The Company’s securities should be considered a highly speculative investment and investors are directed to carefully consider all of the information disclosed in the Company’s Canadian and U.S. regulatory filings prior to making an investment in the Company, including the risk factors discussed under the heading “Risk Factors” in the Company’s most recent Annual Information Form (“AIF”) dated March 29, 2019 available on SEDAR at www.sedar.com and www.sec.gov.

24

MAG SILVER CORP.

Management’s Discussion & Analysis

For the three and six months ended June 30, 2019 and 2018

(expressed in thousands of US dollars except as otherwise noted)

The volatile global economic environment has created market uncertainty and volatility in recent years. The Company remains financially strong and will monitor the risks and opportunities of the current environment carefully. These macro-economic events have in the past, and may again, negatively affect the mining and minerals sectors in general. The Company will consider its business plans and options carefully going forward.

In the normal course of business, the Company enters into transactions for the purchase of supplies and services denominated in Canadian dollars or Mexican Pesos. The Company also has cash and other monetary assets and liabilities denominated in Canadian dollars and Mexican Pesos. As a result, the Company is subject to foreign exchange risk from fluctuations in foreign exchange rates (see Note 11(c) in the consolidated financial statements of the Company as at June 30, 2019).

Juanicipio Development Decision

The actual scope, design and operating results of the Juanicipio Project may differ from the scope, design and results envisaged in the 2017 PEA. While the results of the 2017 PEA are promising, by definition a Preliminary Economic Assessment is preliminary in nature and includes Inferred Mineral Resources that are considered too geologically speculative to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability and there is no certainty that Mineral Resources will ever become Mineral Reserves. There can therefore be no certainty that the results in the 2017 PEA will be realized. In addition, the 2017 PEA was commissioned independently by MAG, and not by Minera Juanicipio. Fresnillo is the project operator and the actual development plan and timeline may be materially different. As a result, there are additional risks as to the extent of capital and operating costs, mineral recovery and financial viability of the project.

18. Off-Balance Sheet ArrangementS

The Company has no off-balance sheet arrangements.

19. Related Party TransactionS

The Company does not have offices or direct personnel in Mexico, but rather is party to a Field Services Agreement, whereby it has contracted administrative and exploration services in Mexico with MINERA CASCABEL S.A. de C.V. (“Cascabel”) and IMDEX Inc. (“IMDEX”). Dr. Peter Megaw, the Company’s Chief Exploration Officer, is a principal of both IMDEX and Cascabel, and is remunerated by the Company through fees paid to IMDEX. In addition to corporate executive responsibilities with the Company, Dr. Megaw is responsible for the planning, execution and assessment of the Company’s exploration programs, and he and his team developed the geologic concepts and directed the acquisition of the Juanicipio Project.

25

MAG SILVER CORP.

Management’s Discussion & Analysis

For the three and six months ended June 30, 2019 and 2018

(expressed in thousands of US dollars except as otherwise noted)

During the period, the Company incurred expenses with Cascabel and IMDEX as follows:

	Three months ended June 30,				Six months ended June 30,
		2019		2018		2019		2018
Fees related to Dr. Megaw:
Exploration and marketing services	$	62	$	68	$	136	$	135
Travel and expenses		25		19		45		46
Other fees to Cascabel and IMDEX:
Administration for Mexican subsidiaries		14		18		31		36
Field exploration services		73		111		161		206
	$	174	$	216	$	373	$	423

All transactions are incurred in the normal course of business, and are negotiated on terms between the parties which are believed to represent fair market value for all services rendered. A portion of the expenditures are incurred on the Company’s behalf, and are charged to the Company on a “cost + 10%” basis. The services provided do not include drilling and assay work which are contracted out independently from Cascabel and IMDEX. Included in trade and other payables at June 30, 2019 is $88 related to these services (June 30, 2018: $179).

Any amounts due to related parties arising from the above transactions are unsecured, non-interest bearing and are due upon receipt of invoices.

The Company is obligated to a 2.5% NSR royalty on the Cinco de Mayo Project payable to the principals of Cascabel under the terms of an option agreement dated February 26, 2004, whereby the Company acquired a 100% interest in the property from Cascabel, and under the terms of assignment agreements entered into by Cascabel with its principals.

Intercorporate Structure

The immediate parent and ultimate controlling party of the consolidated group is MAG Silver Corp. (incorporated in British Columbia, Canada).

The details of the Company’s significant subsidiaries and ownership interests are as follows:

	Country of	Principal	MAG's effective interest
Name	Incorporation	Project	2019 (%)			2018(%)
Minera Los Lagartos, S.A. de C.V.	Mexico	Juanicipio		100	%		100	%
Minera Pozo Seco S.A. de C.V.	Mexico	Cinco de Mayo		100	%		100	%

Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation and are not disclosed in this note.

Minera Juanicipio, S.A. de C.V. (“Minera Juanicipio”), created for the purpose of holding and operating the Juanicipio Project, is held 56% by Fresnillo plc (“Fresnillo”) and 44% by the Company. Fresnillo is the operator of Minera Juanicipio, and with its affiliates, beneficially owns 11.3% of the common shares of the Company as at June 30, 2019, as publicly reported. Minera Juanicipio is currently governed by a shareholders agreement. All costs relating to the project and Minera Juanicipio are required to be shared by the Company and Fresnillo pro-rata based on their ownership interests in Minera Juanicipio.

26

MAG SILVER CORP.

Management’s Discussion & Analysis

For the three and six months ended June 30, 2019 and 2018

(expressed in thousands of US dollars except as otherwise noted)

During the period, compensation of key management personnel (including directors) was as follows:

	Three months ended June 30,				Six months ended June 30,
	2019		2018		2019		2018
Salaries and other short term employee benefits	$	280	$	272	$	567	$	546
Share based payments		920		171		1,018		342
	$	1,200	$	443	$	1,585	$	888

Note: Share based payments above includes a DSU grant of $675 where the comparable prior period 2018 grant occurred after June 30, 2018, and is therefore not comparable to the prior period.

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Company, directly or indirectly, and consists of its Directors, the Chief Executive Officer and the Chief Financial Officer.

20. CRITICAL ACCOUNTING ESTIMATES

The preparation of financial statements in accordance with IFRS, requires Management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of revenues and expenditures during the reporting period. Management has identified (i) mineral property acquisition and deferred exploration and evaluation costs, (ii) provision for reclamation and closure, (iii) deferred income tax provision (iv) share based payments, (v) equity investments, and (vi) financial instruments, as the main estimates for the following discussion. Please refer to Note 2 of the Company’s unaudited condensed interim consolidated financial statements as at June 30, 2019 for a description of all of the significant accounting policies.

Under IFRS, the Company defers all costs relating to the acquisition and exploration of its mineral properties (“exploration and evaluation” assets). Any revenues received from such properties are credited against the costs of the property. When commercial production commences on any of the Company’s properties, any previously capitalized costs would be charged to operations using a unit-of-production method. The Company reviews and assesses when events or changes in circumstances indicate the carrying values of its properties may exceed their estimated net recoverable amount, and a provision is made for any impairment in value. IFRS also requires the reversal of impairments if conditions that gave rise to those impairments no longer exist.

The existence of uncertainties during the exploration stage and the lack of definitive empirical evidence with respect to the feasibility of successful commercial development of any exploration property does create measurement uncertainty concerning the estimate of the amount of impairment to the value of any mineral property. The Company relies on its own or independent estimates of further geological prospects of a particular property and also considers the likely proceeds from a sale or assignment of the rights before determining whether or not impairment in value has occurred.

Reclamation and closure costs have been estimated based on the Company’s interpretation of current regulatory requirements, however changes in regulatory requirements and new information may result in revisions to estimates. The Company recognizes the fair value of liabilities for reclamation and closure costs in the period in which they are incurred. A corresponding increase to the carrying amount of the related assets is generally recorded and depreciated over the production life of the asset.

27

MAG SILVER CORP.

Management’s Discussion & Analysis

For the three and six months ended June 30, 2019 and 2018

(expressed in thousands of US dollars except as otherwise noted)

The deferred income tax provision is based on the liability method. Deferred taxes arise from the recognition of the tax consequences of temporary differences by applying enacted or substantively enacted tax rates applicable to future years to differences between the financial statement carrying amounts and the tax bases of certain assets and liabilities. The Company records only those deferred tax assets that it believes will be probable, that sufficient future taxable profit will be available to recover those assets.

Under IFRS 2 - Share-based Payments, stock options are accounted for by the fair value method of accounting. Under this method, the Company is required to recognize a charge to the statement of loss based on an option-pricing model based on certain assumptions including dividends to be paid, historical volatility of the Company’s share price, an annual risk free interest rate, forfeiture rates, and expected lives of the options. The fair value of performance share units awarded with market price conditions is determined using a risk-neutral asset pricing model, based on certain assumptions including dividends to be paid, historical volatility of the Company’s share price, a risk free interest rate, and correlated stock returns.

The Company may invest in equity investments for strategic reasons. In such circumstances, management considers whether the facts and circumstances pertaining to each investment result in the Company obtaining control, joint control or significant influence over the investee entity. In some cases, the determination of whether or not the Company has control, joint control or significant influence over the investee entities requires the application of significant management judgment to consider individually and collectively, a variety of factors.

Under IFRS 9 – Financial Instruments, the Company is required to value warrants that meet the definition of derivatives at fair value with unrealized gains and losses recognized in the statement of loss. To measure this fair value, warrants listed on a recognized exchange are valued at the latest available closing price. Warrants not listed on a recognized exchange, but where a secondary market exists, are valued at independent broker prices (if available) traded within that secondary market. If no secondary market exists, the warrants are valued using the Black Scholes option pricing model.

21. CHANGES IN ACCOUNTING STANDARDS

(i)Adoption of new and amended IFRS pronouncements.

The Company has adopted the following new accounting pronouncements effective as at January 1, 2019.

IFRS 16 Leases. The Company adopted all the requirements of IFRS 16 Leases (“IFRS 16”) as of January 1, 2019. IFRS 16 supersedes IAS 17 Leases, IFRIC 4 Determining whether an Arrangement contains a Lease, SIC-15 Operating Leases Incentives and SIC-27 Evaluating the Substance of Transactions Involving the Legal Form of a Lease. The standard sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for most leases under a single on-balance sheet model. The Company elected the cumulative catch-up approach resulting in no restatement of prior year comparatives. The Company elected not to recognize right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less and leases of low-value assets. The lease payments associated with these leases are recognized as an expense in the profit or loss. Note 8 of the Company’s unaudited condensed interim consolidated financial statements as at June 30, 2019, outlines the effect of adopting IFRS 16 requirements on January 1, 2019.

28

MAG SILVER CORP.

Management’s Discussion & Analysis

For the three and six months ended June 30, 2019 and 2018

(expressed in thousands of US dollars except as otherwise noted)

At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for the period of time in exchange for consideration. The Company assesses whether the contract involves the use of an identified asset, whether the Company has the right to obtain substantially all of the economic benefits from use of the asset throughout the contract term and if the Company has the right to direct the use of the asset.

As a lessee, the Company recognizes a right-of-use asset and a lease liability at the commencement date of a lease. Right-of-use assets are initially measured at costs, which is comprised of initial amount of the lease liability adjusted for any lease payment made at or before the commencement date.

Right-of-use assets are subsequently depreciated on a straight-line basis from the commencement date to the earlier of the end of the lease term, or the end of the useful life of the asset. In addition, the right-of-use asset may be reduced due to impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

A lease liability is initially measured at the present value of the lease payments to be made over the lease term, discounted by the interest rate implicit in the lease or if that rate cannot be readily determined, the Company’s incremental borrowing rate. Lease payments include fixed payments, variable lease payments that depend on an index or a rate, amounts to be paid under residual value guarantees and the exercise price of a purchase option reasonably certain to be exercised by the Company.

The lease liability is measured at amortized cost using the effective interest method. It is remeasured when there is a modification, a change in the lease term, a change in the fixed lease payments or change in the assessment to purchase the underlying asset.

The Company presents right-of-use asset in the property and equipment line item on the condensed interim consolidated balance sheets and lease liability in the lease obligations line item on the condensed interim consolidated balance sheets.

IFRIC 23 Uncertainty over Income Tax Treatments, provides guidance on the accounting for current and deferred tax liabilities and assets in which there is uncertainty over income tax treatments. The Company adopted this standard as of January 1, 2019 and it had no material impact on the Company’s consolidated financial statements.

Annual Improvements 2015-2017 Cycle. In December 2017, the IASB issued narrow-scope amendments to IFRS 3- Business Combinations, IFRS 11-Joint Arrangements, IAS 12 – Income Taxes and IAS 23 -Borrowing Costs. The Company adopted these amendments as of January 1, 2019 and they had no material impact on the Company’s consolidated financial statements.

(ii) Recent accounting pronouncements

IFRS 3 Business Combinations. In October 2018, IASB issued narrow-scope amendments to IFRS 3 Business Combinations to improve the definition of a business. The amendments are intended to assist entities to determine whether a transaction should be accounted for as a business combination or an asset acquisition. The amended definition emphasizes that the output of a business is to provide goods and services to customers, whereas the previous definition focused on returns in the form of dividends, lower costs or other economic benefits to investors and other. The amendment is effective to acquisitions that occur on or after January 1, 2020 with earlier application permitted. The Company will adopt this amendment on the effective date, and is currently evaluating the impact this standard may have on its consolidated financial statements.

29

MAG SILVER CORP.

Management’s Discussion & Analysis

For the three and six months ended June 30, 2019 and 2018

(expressed in thousands of US dollars except as otherwise noted)

22. CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

The Company maintains a set of disclosure controls and procedures designed to provide reasonable assurance that information required to be disclosed in the reports that it is required to file or submit under applicable securities laws is recorded, processed, summarized and reported in the manner specified by such laws. The Chief Executive Officer and the Chief Financial Officer have evaluated, or caused to be evaluated under their supervision, the design and effectiveness of the Company’s disclosure controls and procedures as of June 30, 2019 through inquiry and review, as well as by drawing upon their own relevant experience. The Chief Executive Officer and the Chief Financial Officer have concluded that the Company’s disclosure controls and procedures are effective as at June 30, 2019.

Internal Control Over Financial Reporting

The Company also maintains a system of internal controls over financial reporting, as defined by National Instrument 52-109 - Certification of Disclosure in Issuers’ Annual and Interim Filings in order to provide reasonable assurance that assets are safeguarded and financial information is accurate and reliable and in accordance with IFRS. The Company retains a third party specialist annually to assist in the assessment of its internal control procedures. The Board of Directors approves the financial statements and MD&A before they are publicly filed and ensures that management discharges its financial responsibilities. The unaudited condensed interim consolidated financial statements and MD&A for the three and six months ended June 30, 2019 were approved by the Board on August 7, 2019. The Board’s review is accomplished principally through the Audit Committee, which is composed of independent non-executive directors. The Audit Committee meets periodically with management and auditors to review financial reporting and control matters.

The Chief Executive Officer and Chief Financial Officer have evaluated, or caused to be evaluated under their supervision, the design and effectiveness of the Company’s internal control over financial reporting as of June 30, 2019 based on the criteria set forth in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and have concluded that the Company’s internal control over financial reporting is effective.

There have been no changes in internal controls over financial reporting during the period ended June 30, 2019 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

23. SUBSEQUENT EVENT

Subsequent to June 30, 2019, the Company advanced $17,820 to Minera Juanicipio, representing its 44% share of a $40,500 cash call to fund equipment purchases, the commencement of the process plant construction and further underground development on the Juanicipio property.

30

MAG SILVER CORP.

Management’s Discussion & Analysis

For the three and six months ended June 30, 2019 and 2018

(expressed in thousands of US dollars except as otherwise noted)

24. ADDITIONAL INFORMATION

Additional information on the Company is available for viewing under MAG’s profile on the SEDAR website at www.sedar.com and on SEC’s EDGAR website at www.sec.gov.

31

EX-99.3

Exhibit 99.3

Form 52-109F2
Certification of Interim Filings
Full Certificate

I, George Paspalas, President and Chief Executive Officer of MAG Silver Corp., certify the following:

1. Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of MAG Silver Corp. (the “issuer”) for the interim period ended June 30, 2019.

2. No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.

3. Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.

4. Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.

5. Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings:

(a) designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that:

(i) material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and

(ii) information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and

(b) designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.

5.1 Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

5.2 ICFR – material weakness relating to design: N/A

5.3 Limitation on scope of design: N/A

6. Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on April 1, 2019 and ended on June 30, 2019 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.

Date:  August 12, 2019                                     

/s/ George Paspalas                                      
George Paspalas
President and Chief Executive Officer

EX-99.4

Exhibit 99.4

Form 52-109F2
Certification of Interim Filings
Full Certificate

I, Larry Taddei, Chief Financial Officer of MAG Silver Corp., certify the following:

1. Review: I have reviewed the interim financial report and interim MD&A (together, the “interim filings”) of MAG Silver Corp. (the “issuer”) for the interim period ended June 30, 2019.

2. No misrepresentations: Based on my knowledge, having exercised reasonable diligence, the interim filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the interim filings.

3. Fair presentation: Based on my knowledge, having exercised reasonable diligence, the interim financial report together with the other financial information included in the interim filings fairly present in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the interim filings.

4. Responsibility: The issuer’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (DC&P) and internal control over financial reporting (ICFR), as those terms are defined in National Instrument 52-109 Certification of Disclosure in Issuers’ Annual and Interim Filings, for the issuer.

5. Design: Subject to the limitations, if any, described in paragraphs 5.2 and 5.3, the issuer’s other certifying officer(s) and I have, as at the end of the period covered by the interim filings:

(a) designed DC&P, or caused it to be designed under our supervision, to provide reasonable assurance that:

(i) material information relating to the issuer is made known to us by others, particularly during the period in which the interim filings are being prepared; and

(ii) information required to be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time periods specified in securities legislation; and

(b) designed ICFR, or caused it to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the issuer’s GAAP.

5.1 Control framework: The control framework the issuer’s other certifying officer(s) and I used to design the issuer’s ICFR is Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

5.2 ICFR – material weakness relating to design: N/A

5.3 Limitation on scope of design: N/A

6. Reporting changes in ICFR: The issuer has disclosed in its interim MD&A any change in the issuer’s ICFR that occurred during the period beginning on April 1, 2019 and ended on June 30, 2019 that has materially affected, or is reasonably likely to materially affect, the issuer’s ICFR.

Date:  August 12, 2019                

/s/ Larry Taddei                        
Larry Taddei
Chief Financial Officer

EX-99.5

Exhibit 99.5

MAG Silver Reports Second Quarter Financial Results

VANCOUVER, British Columbia, Aug. 12, 2019 (GLOBE NEWSWIRE) -- MAG Silver Corp. (TSX / NYSE American: MAG) (“MAG” or the “Company”) announces the Company’s unaudited financial results for the three and six months ended June 30, 2019.  For details of the unaudited condensed interim consolidated financial statements and Management's Discussion and Analysis for the three and six months ended June 30, 2019, please see the Company’s filings on SEDAR (www.sedar.com) or on EDGAR (www.sec.gov). 

All amounts herein are reported in $000s of United States dollars (“US$”) unless otherwise specified.

HIGHLIGHTS – JUNE 30, 2019             

• Joint formal Juanicipio Project mine development approval by Fresnillo plc (“Fresnillo”) and MAG announced in the quarter (see Press Release dated April 11, 2019), and an Engineering Procurement Construction Management contract finalized to oversee the mine development.
   
• Progress on Juanicipio has been rapid with multiple engineering milestones delivered, and construction on track for H2-2020 commissioning target according to the operator Fresnillo.
   
• Estimated pre-operative initial capital of $395,000 (100% basis) as of January 1, 2018, less development expenditures incurred since that date to June 30, 2019 of approximately $67,100 (Company therefore estimates approximately $327,900 of remaining initial capital on a 100% basis as at June 30, 2019).
   
• MAG is well funded with cash and cash equivalents as at June 30, 2019 of $113,833 while Minera Juanicipio had working capital of $26,315 as at June 30, 2019.
   
• Subsequent to quarter end, the Company advanced $17,820 to Minera Juanicipio, representing its 44% share of a $40,500 cash call to fund equipment purchases, the commencement of the process plant construction and further underground development on the Juanicipio property.
   
• Underground development continues at Juanicipio and is now approaching 22 kilometres (or 13.7 miles) to date.
   
• 46,060 metre (“m”) infill and step-out exploration drill program completed late in 2018 with assays announced in 2019 (see Press release dated March 4, 2019):
   
  • Valdecañas Deep Zone expanded
    • Deep Zone West: Infill Hole P22 11.6 m (true width) grading 783 grams per tonne (“g/t”) (22.9 ounces per ton (“opt”)) silver, 2.57 g/t gold, 6.52% lead, 9.46% zinc, 0.32% copper.
    • Deep Zone East: Step-out Hole P26: 6.3m (true width) grading 246 g/t (7.2 opt) silver, 1.78 g/t (capped) gold, 7.20% lead, 11.63% zinc, 0.40% copper.
  • “Pre-Anticipada” hangingwall vein discovered in step-out Hole P28: 3.2 m (estimated true width) grading 472 g/t (13.8 opt) silver, 0.31 g/t gold, 0.39% lead, 0.43% zinc and 0.03% copper.
  • “Venadas Vein” discovered with unique North-East (“NE”) orientation: Hole VEN-1 cut 3.0 m (drilling width) grading 392 g/t (11.5 opt) silver & 5.6 g/t gold providing new Juanicipio exploration potential.
     
• Significant exploration on the JV property continues given the recent successes:
  • Four rigs currently drilling the deeper areas of the Valdecañas vein suite, and another rig is following up the discovery of the Venadas vein announced March 4, 2019.             

“This was a landmark quarter for MAG,” said George Paspalas, President and CEO. “The jointly announced go-ahead decision for the process plant construction marks the final stage in bringing Juanicipio into production. On top of that, the discovery of the North-South oriented Venadas veins opens a new chapter of vein discovery on the joint venture ground, most importantly, in the area where we will be mining.  Juanicipio remains a property with remarkable exploration potential.”

Juanicipio Project Update

Mine Development

On April 11, 2019, Fresnillo and MAG as shareholders of Minera Juanicipio, jointly announced formal approval of the Juanicipio mine development plan. The partners of Minera Juanicipio also finalized an EPCM agreement as part of the approval process which defines the specific terms by which Fresnillo is overseeing the continued project development and the construction of the process plant and associated surface infrastructure.  Orders have been placed and the manufacturing of the long lead items for the process plant is well advanced with deliveries expected late 2019 and early 2020.  According to Fresnillo, good progress has been made on engineering and early stage construction, with multiple engineering milestones delivered, and construction on track for commissioning by H2-2020.  The mill-site preparation is underway and the construction of surface infrastructure facilities continues.

Pre-operative initial capital is estimated on a 100% basis as $395,000 as of January 1, 2018, which does not reflect expenditures incurred since that date to June 30, 2019 of approximately $67,100, leaving an estimated $327,900 of remaining initial capital (MAG’s 44% remaining share estimated $144,276 as at June 30, 2019).  

An Operator Services agreement was also finalized by the partners in the project approval process which will become effective on commencement of commercial production. As well, both lead and zinc off-take agreements have been agreed to by the partners whereby both concentrates will be treated at market terms by Met-Mex Peñoles, S.A. De C.V., in Torreón, Mexico.

Both partners acknowledge that there is considerable further exploration opportunity in the license area with future potential to scale-up operations beyond the currently planned 4,000 tonnes per day.

Underground Development

Total underground development at Juanicipio now approaching 22 kilometres (or 13.7 miles) to date, with the current emphasis on: developing the three internal spiral footwall ramps at depth along the full strike length of the Valdecañas Vein system; constructing the underground crushing chamber; advancing the conveyor ramp from both ends to and from the planned mill site (with the box cut for the underground conveyor exit portal now complete); integrating additional ventilation and other associated underground infrastructure, and starting of the internal shaft sinking (head chamber for the shaft has been excavated and winding equipment ordered).

A photo gallery of current progress on the Juanicipio development is available at http://www.magsilver.com/s/PhotoGallery.asp

Exploration
To date in 2019, 18 drill holes have been completed, 11 being infill holes and 7 exploration holes (all assays pending).  There are currently five drill rigs on site. There are four on the Valdecañas Vein which are using Devico directional drilling technology and one conventional drill rig on the newly discovered Venadas Vein.

Qualified Person - All scientific or technical information in this news release, including assay results, is based upon information prepared by or under the supervision of, or has been approved by Dr. Peter Megaw, Ph.D., C.P.G., a Certified Professional Geologist who is a “Qualified Person” for purposes of National Instrument 43-101, Standards of Disclosure for Mineral Projects (“National Instrument 43-101” or “NI 43-101”).  Dr. Megaw is not independent as he is an officer and a paid consultant of the Company.

FINANCIAL RESULTS – THREE AND SIX MONTHS ENDED JUNE 30, 2019

As at June 30, 2019, the Company had working capital of $114,326 (June 30, 2018: $151,765) including cash and cash equivalents of $113,833 (June 30, 2018: $151,404).  Other than an office lease obligation under IFRS 16, the Company currently has no debt and believes it has sufficient working capital to maintain all of its properties and currently planned programs for the next year.  The Company makes capital contributions through cash advances to Minera Juanicipio as ‘cash called’ by operator Fresnillo, based on approved joint venture budgets. In the three and six months ended June 30, 2019, the Company funded advances to Minera Juanicipio, which combined with MAG’s Juanicipio expenditures on its own account, totaled $15,375 and $15,456 respectively (June 30, 2018: $78 and $5,845 respectively).  Subsequent to the period end, the Company also advanced $17,820 to Minera Juanicipio, representing its 44% share of a $40,500 cash call to fund the commencement of process plant construction and further underground development on the property. 

The Company’s net loss for the three and six months ended June 30, 2019 amounted to $961 and $1,403 respectively (June 30, 2018: $2,753 and $2,570 respectively) or $0.01/share and $0.02/share respectively (June 30, 2018: $0.03/share and $0.03/share respectively). 

Share based payment expense incurred in the three and six months ended June 30, 2019 amounted to $1,284 and $1,508 respectively (June 30, 2018: $407 and $811 respectively), and is determined based on the fair value of equity incentives granted and vesting in the period. The increase is primarily due to DSUs granted in the period whereas the comparable prior period grant was recorded in a subsequent quarter.  In the three and six months ended June 30, 2019, the Company earned interest income on its cash and cash equivalents of $782 and $1,626 respectively (June 30, 2018: $783 and $1,465 respectively). The Company recorded its 44% equity income pick up of $480 and $762 respectively (June 30, 2018: $1,623 and $740 equity loss pick up respectively) from Minera Juanicipio related primarily to exchange and deferred taxes. In addition, the Company recorded a deferred income tax benefit of $249 and $568 respectively (June 30, 2018: $1,300 and $102 deferred income tax expense respectively) in relation to the change in temporary timing differences between the book and tax base of its Mexican non-monetary assets.

About MAG Silver Corp. (www.magsilver.com )
MAG Silver Corp. (MAG: TSX / NYSE A) is a Canadian exploration and development company focused on becoming a top-tier primary silver mining company, by exploring and advancing high-grade, district scale, silver-dominant projects in the Americas. Our principal focus and asset is the Juanicipio Property (44%), being developed in Joint Venture partnership with Fresnillo Plc (56%). Juanicipio is located in the Fresnillo Silver Trend in Mexico, the world's premier silver mining camp and we are currently developing the surface and underground infrastructure on the property to support a 4,000 tonnes per day mining operation, with the operational expertise of our JV partner, Fresnillo plc. As well, we have an aggressive exploration program in place targeting multiple highly prospective targets across the property. In addition, we continue to work on regaining surface access to our 100% owned Cinco de Mayo property in Mexico while we seek other high grade, district scale opportunities.

On behalf of the Board of
MAG SILVER CORP.

"Larry Taddei"

Chief Financial Officer

For further information on behalf of MAG Silver Corp. Contact  Michael J. Curlook, VP Investor Relations and Communications
Website: Phone: Toll free:	www.magsilver.com (604) 630-1399 (866) 630-1399	Email: Fax:	info@magsilver.com (604) 681-0894

Neither the Toronto Stock Exchange nor the NYSE American has reviewed or accepted responsibility for the accuracy or adequacy of this press release, which has been prepared by management.

This release includes certain statements that may be deemed to be “forward-looking statements” within the meaning of the US Private Securities Litigation Reform Act of 1995. All statements in this release, other than statements of historical facts are forward looking statements, including statements that address future mineral production, reserve potential, exploration drilling, exploitation activities and events or developments. Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "plan", "continue", "estimate", "expect", "may", "will", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe" and similar expressions. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Although MAG believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include, but are not limited to, changes in commodities prices, changes in mineral production performance, exploitation and exploration successes, continued availability of capital and financing, and general economic, market or business conditions, political risk, currency risk and capital cost inflation. In addition, forward-looking statements are subject to various risks, including that data is incomplete and considerable additional work will be required to complete further evaluation, including but not limited to drilling, engineering and socio-economic studies and investment. The reader is referred to the Company’s filings with the SEC and Canadian securities regulators for disclosure regarding these and other risk factors. There is no certainty that any forward looking statement will come to pass and investors should not place undue reliance upon forward-looking statements.

Please Note: Investors are urged to consider closely the disclosures in MAG's annual and quarterly reports and other public filings, accessible through the Internet at www.sedar.com and www.sec.gov

LEI: 254900LGL904N7F3EL14

GRAPHIC 7 logo.jpg GRAPHIC begin 644 logo.jpg M_]C_X 02D9)1@ ! 0$ 8 !@ #_VP!# @&!@<&!0@'!P<)"0@*#!0-# L+ M#!D2$P\4'1H?'AT:'!P@)"XG("(L(QP<*#7J#A(6&AXB)BI*3E)66EYB9FJ*CI*6FIZBIJK*SM+6VM[BYNL+#Q,7& MQ\C)RM+3U-76U]C9VN'BX^3EYN?HZ>KQ\O/T]?;W^/GZ_\0 'P$ P$! 0$! M 0$! 0 $" P0%!@<("0H+_\0 M1$ @$"! 0#! <%! 0 0)W $" M Q$$!2$Q!A)!40=A<1,B,H$(%$*1H;'!"2,S4O 58G+1"A8D-.$E\1<8&1HF M)R@I*C4V-S@Y.D-$149'2$E*4U155E=865IC9&5F9VAI:G-T=79W>'EZ@H.$ MA8:'B(F*DI.4E9:7F)F:HJ.DI::GJ*FJLK.TM;:WN+FZPL/$Q<;'R,G*TM/4 MU=;7V-G:XN/DY>;GZ.GJ\O/T]?;W^/GZ_]H # ,! (1 Q$ /P#V;5O$EKH] MTMO/#,[,F\% ,8R1W/M5#_A.=/\ ^?:Y_)?\:R?&W.MP_P#7 ?\ H1KQ"_\ M'FLVVHW5O&MILBF=%S$2< D#O3T%JV?0O_"%/%FI:UK)M+L6XB\EG_=QX.1 MCW]Z- U/HG2=6AUBV>>!)$5'V$/C.< ]OK16/X&_Y!-Q_P!=S_Z"**3!&3XV M_P"0W!_UP'_H1KYIU?\ Y#=__P!?,G_H1KZ6\;?\AN#_ *X#_P!"-?-.K_\ M(;O_ /KYD_\ 0C3>P1W*=%%%(L**Z/PKH,>NPZHCC][' OD-G[LA)Q_+'XUS MK*R.R.I5E)# ]B.HH%<2BBK>EZ?)JFIV]E%PTS@$_P!T=S^ S0,J45L>*=/@ MTOQ%S_ ,Q7*UU7P]_Y&<_]>S_S M%"$]CZ.\#?\ ()N/^NY_]!%%'@;_ )!-Q_UW/_H(HILE;&3XV_Y#<'_7 ?\ MH1KYIU?_ )#=_P#]?,G_ *$:^EO&W_(;@_ZX#_T(U\TZO_R&[_\ Z^9/_0C0 M]@CN4Z***19WG@2XATW1-2U"_TKI/$U_%;ZQIVE6C?Z+I11./XI,@L?\^]!3["_$2+R_$B28_UENI_(D5R M==W\3(O],TZ<=&1T_(@_UKA*&"V"NJ^'O_(SG_KV?^8KE:ZKX>_\C.?^O9_Y MBD@>Q]'>!O\ D$W'_7<_^@BBCP-_R";C_KN?_01139*V,GQM_P AN#_K@/\ MT(U\TZO_ ,AN_P#^OF3_ -"-?2WC;_D-P?\ 7 ?^A&OFG5_^0W?_ /7S)_Z$ M:'L$=RG114MN8!.OVH2F'^(1$!OPSQ2+.LU4?9_AGH\70S3;S_X\?\*S_!NL M?V3KR"1MMM!CG(YKEN MU,E+0]-O],@\-ZIJ?B0[<>5_H\7I._!_Q_$UYG)([L\KL6=B69CU)ZYK:UGQ M+EWNEW#1HB*'2<;@5& 1Q7*7)MC.3:+,L.!@3$%O?H,4,2(JZ MKX>_\C.?^O9_YBN5KJOA[_R,Y_Z]G_F*2&]CZ.\#?\@FX_Z[G_T$44>!O^03 MOZJ;;Q5X:UBQ MLT&_3YC'$!ZQC(Q]1N%>0 Y&:!(****!A75?#W_D9S_U[/\ S%!O\ D$W'_7<_^@BBFR5L9/C;_D-P M?]!+9[6VU;7A$\CVL!BMU522TC#L!^'YUQ9.!FN]U M>\NO"7A'1M-LIWMKZXS);NW5<0NWG1?[K,?$4;\C\FX_&F!YK1112&%=5\/?\ D9S_ M ->S_P Q7*UU7P]_Y&<_]>S_ ,Q0A/8^CO W_()N/^NY_P#0111X&_Y!-Q_U MW/\ Z"**;)6QD^-O^0W!_P!'].TZ:\M[K5-5L[>U1]SPL MQ,C8/3&. ?7/2KGCJ[@U/6_M]KJ%M6>?3L2<5SR> _$ MKC/]FE?9I4!_+-5KGPCXAM/];I%R1ZQJ'_\ 0_R)Q^I->:C[H^E B0 MS3%MQFE+>IS_S%S_S%"$]CZ.\#?\@FX_Z[G_T$ M44>!O^03RG4K+ Y1A]._X]:MZ%K5QH.JQWUN M V/EDC)P)$/4?Y[UWNI:?HOCZ!;S3+Q+?5%4 I)PQ']UUZ\=F&:8CS"O1/A? M?WZ%J6 MCW5[>:E:M:0O$J*96 .0V3]!]: 9P_B.\N;S7[\W$\DNRXD5 [DA0&(P!VZ5 ME5M &E%K^LP*%BU6]51 MV$[?XU7NM0O;[_C[O+B<>DLI8?D:JY'K1D>M "T4F1ZT9'K0 M=5\/?^1G/_ M %[/_,5RF1ZUU?P](_X2<_\ 7L_\Q0A/8^CO W_()N/^NY_]!%%'@;_D$W'_ M %W/_H(HILE;%?Q5HVH:CJD8?\(EJO_0-3\T_QH_X1+5?^@:GYI_C7I]%%PL>8?\(EJO\ T#4_-/\ M&C_A$M5_Z!J?FG^->GT47"QYA_PB6J_] U/S3_&C_A$M5_Z!J?FG^->GT47" MQYA_PB6J_P#0-3\T_P :/^$2U7_H&I^:?XUZ?11<+'F'_"):K_T#4_-/\:4> K%-64Y73@I]0R#^M>G447"Q@^$]/NM.TZ:*[B,;M*6 R#Q@>E%;U%(9__V0$! end